Osisko acheives record gold production as it tries to fight off takeover bid
Osisko Mining (TSE:OSK) came out with some news on Tuesday that might whet the appetite of takeover bidder GoldCorp (TSE:G) even further: The company announced that it hit record annual gold production in 2013, putting out 475,277 ounces compared with 388,478 in 2012.
In its end-of-year results, the company reported adjusted net earnings – which include net earnings minus impairment charges – of $116 million for the year, or 27 cents per share, compared with $199.8 million in 2012.
The decrease in adjusted net earnings is mainly the result of lower average selling prices of gold during the fourth quarter of 2013 and higher depreciation charges, Osisko wrote.
Osisko has one operating mine, Canadian Malartic, along with three exploration properties.
"The strong second half results at Canadian Malartic clearly demonstrated the value of this world class gold minem," CEO Sean Roosen said in a statement. "Following Q4, in January 2014, Canadian Malartic achieved record monthly production of 50,111 ounces at cash costs1 of $670 per ounce … The record gold production was achieved despite mill downtime and unusually cold weather conditions."
The Montreal-based company also took the opportunity to comment on GoldCorp's hostile takeover bid, initiated last month.
Under GoldCorp's terms, Osisko shareholders would receive $2.26 in cash and 0.146 share of Goldcorp per Osisko share.
After recommending that shareholders reject GoldCorp's offer, saying that it failed "to adequately compensate the shareholders for the strategic value of Osisko’s world-class asset base," Osisko commenced litigation against the mining giant.
According to mid-tier producer Osisko, GoldCorp "misused confidential information, breached a confidentiality agreement and failed to honour a standstill agreement in launching its hostile bid for Osisko."
The Quebec Superior Court will hear the case in March.
Osisko was trading slightly higher on Tuesday for a price of $7.02 per share, compared with around $6.95 on Friday. The Canadian miner has gained more than 50% over the past three months.