Yamana, Agnico both clear winners in Osisko deal, analyst says


Yamana Gold (AUY -0.6%) and Agnico Eagle (AEM +2%) are "clear winners" for acquiring Osisko Mining (OSKFF) because it is crucial for gold miners to secure low-risk production at this stage in the cycle, National Bank analyst Steve Parsons says.

It is increasingly difficult to find large gold deposits in mining friendly jurisdictions - such as Osisko's Canadian Malartic mine in Quebec - and companies need to look at obtaining those assets now or face declining production profiles in the future, Parsons says, adding that now is a good time for mid-tier miners to do business with senior producers who are busy cleaning up their balance sheets.

For AUY, Parsons says the addition of a low-cost, cornerstone asset should help the stock get re-rated towards its higher-multiple peers; for AEM, the deal is accretive on all metrics and adds another cornerstone asset to its already concentrated portfolio.

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Comments (4)
  • Ninja Trader
    , contributor
    Comments (1726) | Send Message
     
    If AUY is such a "clear winner", why is it tanking?
    23 Apr 2014, 06:31 PM Reply Like
  • Special Situations and Arbs
    , contributor
    Comments (1352) | Send Message
     
    They could be pressure on AUY until the deal closes in 6 weeks....re arb
    24 Apr 2014, 01:07 AM Reply Like
  • options45
    , contributor
    Comments (23) | Send Message
     
    Deal stinks. Over paid.
    24 Apr 2014, 06:13 AM Reply Like
  • Special Situations and Arbs
    , contributor
    Comments (1352) | Send Message
     
    I have read three separate blurbs including this one that believe this is a smart deal for AUY.
    24 Apr 2014, 09:56 AM Reply Like
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