Osisko Corporate Presentation - February 25th 2014 - BMO conference

50 %
50 %
Information about Osisko Corporate Presentation - February 25th 2014 - BMO conference
Investor Relations

Published on February 25, 2014

Author: Osisko

Source: slideshare.net

Canada’s Leading Intermediate Gold Producer February 2014

Forward Looking Statements Forward Looking Statements This presentation may include certain “forward-looking statements”. All statements other than statements of historical fact, included herein, including, without limitation, statements regarding future plans and objectives of the company, are forward-looking statements that involve various risks, assumptions, estimates and uncertainties. These statements reflect the current internal projections, expectations or beliefs of Osisko Mining Corporation (“the Company”) and are based on information currently available to the company. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. All of the forward looking statements contained in this presentation are qualified by these cautionary statements and the risk factors described above. Furthermore, all such statements are made of the date this presentation is given. An investment in the Company is speculative due to the nature of the Company's business. The ability of the Company to carry out its growth initiatives as described in this PowerPoint presentation is subject to risk factors which are described in more detail in the Company’s Annual Information Form filed with the securities commissions or similar authorities in certain of the provinces of Canada. Investors should not place undue reliance on forward-looking statements as the plans, intentions or expectations upon which they are based might not occur. Investors and others who base themselves on the Company's forward-looking statements should carefully consider such risk factors as well as the uncertainties they represent and the risk they entail. The Corporation also cautions readers not to place undue reliance on these forwardlooking statements. The forward-looking statements contained in this report are expressly qualified by this cautionary statement. United States Securities Law Considerations The securities of the Company are not listed in the United States and this presentation shall not be construed as an advertisement or public offering of the securities to U.S. investors. 2

Goldcorp’s Offer is a ZERO Premium Offer 30% 30% 0% (4%) Offer Premium to PreAnnouncement Price Osisko Peers Performance Since Goldcorp Offer Market Adjusted Current Offer Discount Goldcorp Premium to to OSK Share Price Pre-Announcement Price Note: Peers include Agnico Eagle, Alacer, Alamos, AuRico, B2Gold, Detour, Eldorado, IAMGOLD, Randgold and New Gold. 3

Goldcorp’s Offer is Inadequate  Osisko is better at building mines  Osisko is a better operator in Québec  Osisko has a better track record of shareholder value creation  Osisko is still significantly better value than Goldcorp Reject the Goldcorp Hostile Offer 4

Better Builders • Canadian Malartic built on time and on budget • Osisko has not materially financed since 2009 • Osisko shareholders to benefit from 16 years of significant production and free cash flow Estimated Construction Delay (years) Estimated Cost Overrun as a % of Dev. Capex 4.25 2.50 134% 2.50 51% -- 0.25 0.50 70% 132% 56% 18% Source: Company disclosure. 5

Osisko’s Fast Track to Production Six Years from Discovery to First Gold Pour First Drill Hole Oct. 2004 Purchase of Canadian Malartic Property Mar. 2005 Feasibility Study Dec. 2006 Initial Resource Calculation Nov. 2008 Commercial Production Commencement Completion of Construction Aug. 2009 Government Decree & Construction Release Mar. 2011 2013 Gold Production of ~475 koz at C$760/oz Apr. 2011 First Gold Pour May. 2011 Dec. 2012 First Full Year of Operations Dec. 2013 Canadian Malartic Mine Produces Millionth Ounce 6

Better in Québec Canadian Malartic Construction Timeline Éléonore 18 Months 36 Months $1.8 - 1.9 Billion Development Capex $1 Billion $0.7 Billion (On time and on budget) (~150-170% higher than initial budget) Annual Production 574k oz Au 600k oz Au Capex Per Annual Production $1,707/oz ~$3,000-$3,200/oz If they had let the Osisko team build Éléonore, would have saved shareholders ~$300 million Source: Company disclosure. 7

Better Historical Shareholder Value Creation Canadian Malartic Éléonore $30.67 $7.03 Share Price on Acquisition vs. Current $23.78 Current Share Price on Acquisition $0.10 Share Price on Acquisition Current $70.3MM Current Value of a $1 Million Investment Made at Time of Acquisition $1.3MM Current Shareholder Return 6,930% Current 29% Source: Company disclosure and Bloomberg. 8

High-quality Single Asset Companies Generate Superior Returns • • Goldcorp has said it believes Canadian Malartic will command greater value in the Goldcorp portfolio than in a company with a single dominant producing mine However, Goldcorp itself had better share price performance as a primarily single asset company before its merger with Wheaton River Minerals – Transaction was announced December 6, 2004 Goldcorp Performance vs. S&P/TSX Index Before December 6, 2004 Goldcorp Performance vs. S&P/TSX Index After December 6, 2004 352% 273% 263% 133% 75% 43% 16% (5%) 6 Years Prior 5 Years Prior 4 Years Prior 3 Years Prior 1 Year After 3 Years After 5 Years After To January 17, 2014 Source: Bloomberg. 9

Industry Leading Cash Flow and Growth Pipeline Operations Advanced Exploration & Development Greenfield Exploration Upper Beaver & Satellite Deposits Kirkland Lake Camp (Kirkland Lake, Ontario) (Kirkland Lake, Ontario) Canadian Malartic Mine (Malartic, Québec) • Indicated and inferred resources of 2.2 M oz Au and 1.9 M oz Au (2) • Canada’s largest gold mine • Largest holdings in the Kirkland Lake Camp covering 230 km² Guerrero Gold Belt (Atikokan, Ontario) (Guerrero State, Mexico) • Global Au M&I resources of 5.4 M oz and 1.8 M oz inferred (3) • Permitting underway • Open-pit bulk tonnage operation Hammond Reef Project • 9,600 km2 of holdings in the GGB • Belt hosts over 30 million ounces in gold discoveries to date • Premier mining jurisdiction • Low cost, reliable power • Reserves of 10.1 M oz Au (1) (1) NI 43-101 Proven and Probable Reserves: 310.6 Mt @ 1.01 g/t Au (2) NI 43-101 Measured and Indicated Resources: 12.9 Mt @ 4.98 g/t Au and Inferred Resources: 13.0 Mt @ 4.50 g/t Au (3) NI 43-101 Measured and Indicated Resources: 196.4 Mt @ 0.86 g/t Au; NI 43-101 Inferred Resources: 75.7Mt @ 0.72 g/t Au 10

January 2014 – Record Production  Record monthly gold production of 50,111 ounces  Monthly mill throughput of 1,521,164 tonnes  Average daily throughput of 49,070 tonnes per operational day  Average grade milled of 1.16 g/t Au  Average recovery of 88.6% 11

Steady Production Growth, Steady Cost Reduction Cash Costs1 (C$/oz) Gold Production (k oz) 137.3 $892 $851 120.2 $821 111.7 $833 $804 103.8 101.5 106.0 91.2 $781 $754 92.0 $713 Q1 '12 1. Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Balances related to 2012 have been adjusted to reflect the impact of the adoption of IFRIC 20, Stripping Costs on the Production Phase of a Surface Mine. Q4 '13 12

Improved Access to High Grade Zones Canadian Malartic M&I Resource with Final Pit Design Canadian Malartic M&I Resource Shell at : 1.0 g/t cut-off 0.7 g/t cut-off Main Deposit 0.3 g/t cut-off Barnat Zone Canadian Malartic M&I Resource with Pit as at February 11, 2014 Main Deposit 13

Mill Production Progress Mill Throughput (Avg. tonnes per operating day) 54.1 54.0 52.6 48.7 47.5 • • • • • 43.2 38.1 35.7 Added 2013 Progress crushing capacity Improved mill availability Added crushing capacity Showing steady progress on Improved mill availability throughput Showing steady progress on Metallurgical recoveries throughput expectations exceeding • • • 2 1 Q1 '12 Q2 '12 3 Q3 '12 5 4 Q4 '12 Q1 '13 6 Q2 '13 7 Q3 '13 Metallurgical recoveries exceeding expectations 8 Q4 '13 Au Recovery 91.2% 89.2% 88.7% 88.8% 88.0% 89.7% 89.2% 88.6% 1. 2. 3. 4. 5. 6. 7. 8. In Q1 2012, the mill was shut down for a seven-day period for the installation of the first unit of the secondary crusher and one day for maintenance. In Q2 2012, the mill was shut down for a six-day period following a fire at the mill. In Q3 2012, the mill was shut down for a scheduled five-day period for a liner change (secondary crushers, SAG and ball mills). In Q4 2012, the mill was shut down 6 days for scheduled maintenance and the second pebble installation. The throughput at the mill was reduced at 42,000 tonnes per day for a 15-day period during the installation of the second pebble crusher. In Q1 2013, the mill was shut down for 3 days for maintenance on the conveyor and for SAG mill liner change. In Q2 2013, the mill was shut down for 6.5 days, including 5.5 days for scheduled maintenance. In Q3 2013, the mill was shut down for 5.5 days for scheduled maintenance. In Q4 2013, the mill was shut down for 6 days for scheduled maintenance. 14

Cost Improvement Operating Costs per Tonne Milled (C$/t milled) Cost Performance • Before transport and refining, royalties, share based compensation and silver credits – Last on-surface crown pillar blasted in December $23.24 2.31 $20.02 2.14 $20.66 1.92 • Setting the stage to extract higher volumes from the north wall $21.16 2.12 – Impact on costs due to priority given to the northern area of the pit (smaller blasts, presence of open stopes, remote operation of equipment). 10.37 9.04 10.57 Mining costs: 10.01 9.38 8.84 8.72 9.66 • Milling costs: – Lower liner wear 2012(1) Mining(2) 1. 2. 2013 Milling G&A Q4 '12 Mining(2) – Lower grinding media costs Q4 '13 Milling G&A Balances related to 2012 have been adjusted to reflect the impact of the adoption of IFRIC 20, Stripping Costs on the Production Phase of a Surface Mine. Includes variation in stockpile inventory. • Q4 cost per tonne mined: $3.03 (2013: $2.72) 15

Strong Cash Flow Generation Earnings from Mine Operations (C$ million) Operating Cash Flow (C$ million) $190.3 $261.6 $53.7 $72.5 Q4 '13 2013 Q4 '13 2013 16

Best Free Cash Flow Yield in the Sector 2013 Q3 YTD Free Cash Flow Yield (%) 5% 1% (2%) (5%) (6%) (7%) (8%) (9%) (10%)(10%) (20%)(22%) (27%) Source: Credit Suisse First Boston Detour Gold IAMGOLD Golden Star Aurico Goldcorp Kinross Barrick Yamana Newmont Agnico Eagle New Gold Eldorado Alamos Osisko (58%) 17

Financial Position (C$ millions) Cash1 Dec. 31, 2012 Dec. 31, 2013 $155.5 $210.5 $92.0 $132.4 $337.4 $317.0 Total Assets $2,687.9 $2,222.0 Shareholders’ Equity $2,162.0 $1,731.1 $194.8 $118.7 Working Capital Debt2 Net Debt Demonstrating Canadian Malartic’s ability to build cash, service & repay debt 1. 2. Includes cash and cash equivalents, restricted cash and short-term investments. Includes CPPIB debt facility, Ressources Québec and CDPQ convertible debt, FSTQ debt facility, Caterpillar equipment finance lease and Caterpillar Finance Commercial Account. 18

Creating a Dominant Land Position in World Class Mining Camps ~ 12% 130 km 19

Strategic Land Package in the Kirkland Lake/ Larder Lake District 35 M oz of historic gold production in the district – Single biggest property in district history Canadian Kirkland 230km2 hosting five deposits with disclosed NI 43-101 resources 20

Canadian Kirkland Hole No. MU14-25 And (Diluted) From (m) 110.0 243.0 110.0 To (m) 211.6 306.0 306.0 Length (m) 101.6 63.0 196.0 Au g/t 0.99 1.43 1.02 MU14-26 And 83.0 274.0 105.0 284.0 22.0 10.0 0.59 3.03 MU14-27 And And 52.0 138.0 243.7 85.0 164.0 298.0 33.0 26.0 54.3 0.46 1.66 0.46 MU14-28 And And 39.6 211.0 244.0 168.0 226.0 261.0 128.4 15.0 17.0 2.26 1.01 0.47 21

Large Land Position in the Guerrero Gold Belt • 9,600 km2 of tenements • 165 drill targets • 5 drills currently turning 22

Goldcorp’s Offer is a ZERO Premium Offer 30% 30% 0% (4%) Offer Premium to PreAnnouncement Price Osisko Peers Performance Since Goldcorp Offer Market Adjusted Current Offer Discount Goldcorp Premium to to OSK Share Price Pre-Announcement Price Note: Peers include Agnico Eagle, Alacer, Alamos, AuRico, B2Gold, Detour, Eldorado, IAMGOLD, Randgold and New Gold. 23

Osisko Offers Significantly Better Value Than Goldcorp Per $1,000 invested… Gold Reserves (oz) 2013 Gold Production (oz) 2013 Q4 Operating Cash Flow (C$) Osisko better by 46% Osisko better by 44% Osisko better by 78% 3.3 0.154 $23.48 0.107 2.2 $13.19 Goldcorp Osisko Goldcorp Osisko Goldcorp Osisko Source: Company disclosure and FactSet. 24

Appendix 25

For further information regarding the material properties of Osisko please see: a) the technical report on the Canadian Malartic Property entitled “Updated resource and reserve estimates for the Canadian Malartic project (Malartic, Québec)” dated May, 2011 by Belzile Solutions, G Mining, b) the technical report on the Hammond Reef Property entitled “Technical Report on the Hammond Reef Gold Property, Atikokan area, Ontario” dated December 20, 2011 by SGS Canada Inc. and G Mining, c) the technical report on the Upper Beaver Property entitled “Technical Report on the Upper Beaver Gold-Copper Project, Ontario, Canada” dated November 5, 2012 by SRK Consulting (Canada) Inc., all of which are filed under Osisko at www.sedar.com. Tonnes (MM) CANADIAN MALARTIC AND SOUTH BARNAT Proven Reserves Probable Reserves Proven & Probable Reserves Grade (g/t) Au (MM oz) 41.80 256.90 298.60 0.94 1.04 1.03 1.26 8.60 9.86 GOULDIE & JEFFREY* Proven Reserves Probable Reserves Proven & Probable Reserves 3.66 5.41 9.08 0.78 0.78 0.78 0.09 0.14 0.23 STOCKPILES Proven Reserves Probable Reserves Proven & Probable Reserves 3.47 0.00 3.47 0.51 0.00 0.51 0.06 0.00 0.06 TOTAL Proven Reserves Probable Reserves Proven & Probable Reserves 48.80 261.80 310.60 0.89 1.04 1.01 1.40 8.72 10.12 *Jeffrey represents the 70% portion owned by Osisko Non-IFRS Financial Performance Measures The Company has included certain non-IFRS measures including “cash costs per ounce” to supplement its consolidated financial disclosure, which is presented in accordance with IFRS. The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. Non-IFRS measures do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures employed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Cash costs per ounce - “Cash costs per ounce” is defined as the production costs of one ounce of gold excluding non-cash costs for a certain period. “Cash costs per ounce” is obtained from “Production costs” and “Royalties” less non-cash “Share-based compensation” and “By-product credits (silver sales)”, adjusted for “Production inventory variation” for the period, divided by the “Number of ounces of gold produced” for the period. The reconciliation table can be found in the most recent Management Discussion and Analysis of the Company as filed on www.sedar.com. 26

Add a comment

Related presentations

Gage-Cannon Investor Services

Gage-Cannon Investor Services

November 10, 2014

Gage-Cannon helps ventures accelerate organic growth or obtain equity funding, and...

Mavenir Analyst Day

Foro MAB Sevilla 13 de noviembre de 2014

ING Q3 2014 Earnings Report

ING Q3 2014 Earnings Report

November 5, 2014

Analyst presentation third quarter 2014 results. ING posts 3Q14 underlying net pro...

Related pages

Osisko Corporate Presentation - BMO Metals & Mining ...

Osisko Corporate Presentation - BMO Metals & Mining Conference - February-March 2016
Read more

2014 BMO Global Metals & Mining Conference February 23-26 ...

2014 BMO Global Metals & Mining Conference February 23 ... Information contained in this presentation and the documents incorporated by ... February 2014 2.
Read more

Upcoming Events - bmo.com

Presentations & Events. Current Events; ... BMO Financial Group's Q3 2016 Earnings Release and Conference Call August 23, 2016
Read more

BMO Capital Markets to Host 23rd Annual Global Metals ...

BMO Capital Markets to Host 23rd Annual ... 2014) - BMO Capital Markets will host its annual Global Metals & Mining Conference from February 24 to ...
Read more

2015 Global Metals & Mining Conference - BMO Capital Markets

2014 Past Conferences. ... BMO Capital Markets is pleased to be hosting its 24th Conference dedicated exclusively to the metals & mining sector from ...
Read more

BMO Capital Markets to Host 23rd Annual Global Metals ...

The latest BMO Capital Markets News. ... annual Global Metals & Mining Conference from February 24 to ... presentations from some of the ...
Read more

BMO Capital Markets to Host 23rd Annual Global Metals ...

... Mining Conference from February ... 25th Annual Global Metals & Mining Conference: ... Mining Conference: Nov 18, 2014 13:50 HKT/SGT: BMO ...
Read more

THE LEADING INTERMEDIATE ROYALTY COMPANY - Osisko

THE LEADING INTERMEDIATE ROYALTY COMPANY Corporate Presentation BMO GLOBAL METALS & MINING CONFERENCE ... developments or performance that Osisko ...
Read more