Mine startup on schedule for May
posted on
Nov 05, 2010 11:57AM
gold royalty company - 5% NSR on Malartic.
http://www.montrealgazette.com/business/Mine+startup+schedule/3781257/story.html
Osisko Mining Corp. expects to start up its $956-million Canadian Malartic gold mine near Val d'Or on time in May and CEO Sean Roosen is shifting his exploration team to the Hammond Reef property in Ontario and Duparquet north of Rouyn-Noranda.
"We aim to produce 450,000 ounces at Malartic in the first seven months next year, rising to 700,000 ounces in 2012," he said after addressing Le cercle finance et placement du Quebec yesterday.
That will launch Osisko well along the road toward becoming a strong mid-tier gold producer, with annual output of one million ounces or more by 2016, he added. Reserves are now pegged at nine million ounces and will grow as Malartic is expanded north and Hammond Reef is developed.
Hammond Reef, near Atikokan, has an estimated resource (not yet proven) of 6.7 million ounces and is due on stream in 2015 with an investment of $750 million. A heavy drilling program this year at Duparquet indicated strong potential but there is no startup date.
"Once Malartic is in full swing we'll be looking at annual cash flows of $500 million to $600 million, at present gold prices, and that means we'll be casting our net further in Quebec and Ontario and also in Western Canada for properties with potential annual output of 200,000 ounces or more."
Gold miners have to grow and keep replacing their reserves, he said, "and we regard North and South America as logical hunting grounds -but there's no way we'd consider Africa or Asia."
Roosen and his team have built a gold mining company with a market capitalization of $5.5 billion, up from $6 million five years ago. Osisko has raised $1.1 billion in equity and $335 million in debt financing to fund its projects.
Malartic's biggest worries came from human-scale issues, he said. including the $130-million program to relocate 200 homes from near the minesite and build new town infrastructure. The mining, crushing and leach mill are based on well-tried technology and Osisko expected the project would win permits and environmental clearance.
Malartic will provide 465 permanent jobs, after the 800-strong construction labour force winds down.
Osisko is studying the possibility of going underground as Malartic moves toward the end of its 20-year life cycle.
Osisko has 170 people working at the Hammond Reef property 45 kilometres north of Atikokan. It will be a low -cost producer, like Malartic. He calls it "another Malartic without the relocation" though the process technology will more complex than Malartic's.
Takeover talk persists and Osisko recently passed a shareholder rights plan. Goldcorp Inc. is a major shareholder along with the Dundee Wealth Management and Dynamic Funds group.