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Osisko Mining (OTCPK:OSKFF) poured the first gold from their Malartic mine in April after spending slightly more than two years building out the mine.

The Malartic mine, located in the famous Abitibi gold belt in Quebec Canada, produced over 5 million ounces of gold from 1935 to 1983 from four mines. Osisko acquired the property in November of 2004 and commenced a drilling program in early 2005 which has totaled over 750,000 meters to date. The most recent 43-101 indicates the mine site holds 10.71 million Proven & Probable Reserves and 11.8 million Measured and Indicated Resources of gold.

At the peak of the financial crisis in February of 2009, Osisko raised $400 million dollars in an oversubscribed bought deal when it appeared as though the capital markets were closed. At the time the keyword for exploration and development companies in 2009 was survival and it was unsure if large deposits like Osisko’s could obtain financing.

By raising money at the bottom when prices for mining equipment and labor had crashed as credit markets locked up Osisko saved millions of dollars in equipment acquisition costs.

The hardest part of building out the Malartic mine had yet to come. A portion of the deposit was located under the town of Malartic which necessitated the relocation of more than 150 homes and five institutional buildings. The town has been very cooperative with Osisko as the major employer, a local forest mill, closed creating depressed conditions within the town.

By moving forward in 2009 Osisko avoided the inflationary trends which have taken hold in the mining industry. Osisko was able to leverage the ability of job creation at a time when many companies were retrenching.

On June 17th of this year Osisko achieved commercial production at its Malartic mine producing an average of 33,300 tonnes per day.

Continuation of the current drilling program has expanded the deposit south of the pit outside of the Barnat and Jeffrey zones leading to the belief that the deposit may be much larger than estimates indicate.

The Osisko mine buildout team now shifts their focus to the Hammond Reef Project in Ontario, which came in the Brett Resources acquisition. Hammond Reef holds an estimated 6.7 million ounces of gold. Over 56,000 meters were drilled during the quarter and an updated resource statement is expected later this year.

The Canadian Environmental Assessment Agency initiated a 90 day pre-environmental assessment plan in late April to determine if a comprehensive study should be started.

Not content to sit on its heels, Osisko signed an agreement with the La Rioja state mining company on August 31st to develop the Famatina gold project in the La Rioja province of Argentina. The Famatina gold project covers a 40 square kilometer zone hosting numerous targets. Osisko can earn a 70% interest by advancing the project to a feasibility study within the Initial Term of four years although the term can be extended by Osisko for an additional four years.

Osisko Mining has one of the best management teams in the gold sector led by President and CEO Sean Roosen who has guided the company from 2006.

Investors looking for a fresh face in the gold mining sector should cast a glance in the direction of Osisko Mining whose first two gold projects are cornerstone projects.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in OTCPK:OSKFF over the next 72 hours. Source: Osisko website

Source: Osisko Mining Joins The Ranks Of Mid-Tier Producers