Seeking Alpha

Goldcorp -2.2% on Osisko bid, considers Malartic mine low-risk

  • The big prize in Goldcorp's (GG -2.2%) proposed $2.6B bid for Osisko Mining (OSKFF +20.5%) is the giant Canadian Malartic gold mine in Quebec, which is likely to produce 500K-600K oz./year of gold over its 16-year mine life.
  • Osisko had challenges ramping up production, but Goldcorp considers the mine low-risk; during a conference call to discuss the hostile offer, GG says Malartic would be one of its leading mines in terms of free cash flow, production and net asset value, and the mine would benefit from GG's technical and operating expertise (Briefing.com).
  • GG says the deal will be immediately accretive on key operating and financial metrics, including free cash flow, operating cash flow, net asset value, gold production and gold reserves.
  • TD Securities analyst Greg Barnes thinks a rival bid is unlikely given that other senior gold miners are struggling with "heavier balance sheets and generally weaker multiples” relative to Goldcorp.
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Comments (1)
  • Steve Nicastro
    , contributor
    Comments (419) | Send Message
     
    It's a better deal for Goldcorp than Osisko, in my opinion: http://seekingalpha.co...
    13 Jan, 01:43 PM Reply Like
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