Osisko Mining reports fourth-quarter profit down from year-ago mark

The Canadian Press 0

MONTREAL – Osisko Mining Corp. (TSX:OSK), which is fighting a hostile takeover bid by Goldcorp (TSX:G), said Tuesday that it earned $10.5 million in its latest quarter.

The gold miner said the profit amounted to two cents per share for the fourth quarter of 2013 compared with a profit of $12.9 million or three cents per share a year earlier.

Revenue totalled $185.8 million, down from $191.1 million in the fourth quarter of 2012.

The lower revenue came even as quarterly gold production increased to 137,321 ounces from 101,544 a year ago, and gold sales increased to 136,826 ounces compared with 111,104 in the fourth quarter of 2012.

The average sale price, however, dropped to US$1,275 an ounce from US$1,709 a year ago.

Osisko president and chief executive Sean Roosen said the company’s flagship Canadian Malartic mine produced a record 50,111 ounces at a cash costs of $670 per ounce in January.

“The record gold production was achieved despite mill downtime and unusually cold weather conditions,” Roosen said in a statement.

Osisko rejected a hostile takeover bid by Goldcorp in January.

Under terms of the bid, Osisko shareholders would receive 0.146 of a Goldcorp share and $2.26 in cash per Osisko share. However, Osisko shares have traded well above the implied value of the Goldcorp offer since the bid was first announced.

Based on the share prices Tuesday, the offer was worth about $6.69 per Osisko share or a total of about $2.94 billion, while Osisko shares closed up six cents at $7.02 on the Toronto Stock Exchange.

Goldcorp shares were up three cents at $30.35.

Osisko has launched a legal challenge to Goldcorp’s bid and accused the company of breaking a confidentiality agreement and failing to honour a standstill agreement.

A hearing has been set for March 3.

Goldcorp, meanwhile, announced after markets closed Tuesday that it was extending its takeover bid until 5 p.m. on March 10. Terms of the offer remain the same.

Osisko has also said it is working with its financial and legal advisers to develop, review and evaluate alternatives to the Goldcorp offer.

Osisko’s main asset is the Canadian Malartic gold mine in northern Quebec where it has been ramping up operations since its first commercial production in May 2011.

Goldcorp chief executive Chuck Jeannes has said Canadian Malartic would rank among his companies’ best operations if the takeover is successful.

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