Given that Osisko’s $5.40 and $7.90 November 2009 warrants are in the money, he expects these warrants will bring in an additional $317-million.

Excluding the $150-million debt facility, the analyst forecasts Osisko will raise approximately $1-billion this year.

His capex and exploration forecasts suggest the Canadian gold miner will have a significant cushion of $285-million in available cash and credit going into commercial production. That’s assuming Osisko’s in-the-money warrants are exercised.

RBC Capital Markets analyst Michael Curran considered this most recent debt financing as a "backstop" that may not get used – "a conservative move by OSK management to secure full project financing to build the Malartic gold mine."

Construction of the Malartic mine in Quebec began shortly after receiving notice of the granting of permits on August 20, the analyst told clients. Concrete foundation work is now under way and a revised mineplan is expected later this year.

Dundee Securities analyst Ron Stewart looked at a group of gold producers using consensus estimates of 2011 cash flow per share to see what multiple Osisko might expect once they reach steady state production. Using this approach, shareholders could expect Osisko to trade somewhere between 10 to 15x cash flow, he told clients.

The analyst's model suggests Osisko's cash flow per share will average around $1.05 over the first five years of the mine life. That implies Osisko shares will trade in a range of $10.50 to $15.75.

"Shareholders of Osisko can therefore look forward to exciting news in the short term and a compelling value prospect over the long term," Mr. Stewart said.

He rates the shares a Buy and hiked his price target from $8.50 to $9.50.

Jonathan Ratner

http://network.nationalpost.com/np/blogs/tradingdesk/archive/2009/09/25/osisko-expected-to-have-healthy-cash-cushion.aspx