Double down on Osisko

You’d have a hard time finding any company that has outperformed Osisko Mining Corp. over the last five years, in which it has gone from a penny stock to a $5.4-billion giant. But according to Dundee Capital Markets analyst Ron Stewart, Osisko’s massive growth profile makes the stock is a great buying opportunity even today.

“The choice is yours,” he wrote in a cheeky note to clients.

“You can call us now or wait until 2012 and, all things being equal, buy [Osisko] at what we believe will be a much higher price. At some point, it might be time to double down as we expect [Osisko] will double up more than their reserves.”

Put simply, Mr. Stewart figures that Osisko is going to deliver spectacular growth in production and reserves. Right now, the company has established a reserve of nine million ounces of gold at its Canadian Malartic project, and a total mineral inventory of 18.4 million ounces of gold at Canadian Malartic and the Hammond Reef project. Over the course of the next two years, Mr. Stewart wrote that Osisko stands a good chance of nearly doubling the reserve through exploration at Malartic and a feasibility study at Hammond Reef.

That leads to strong production growth as well. With initial production of close to 500,000 ounces expected from Canadian Malartic in 2011, Mr. Stewart thinks Osisko can almost triple production to 1.15 million ounces a year by 2015 if Hammond Reef delivers as well.

He added 2.2 million ounces of gold to his Canadian Malartic reserve model. As a result, his price target on Osisko rose to $18.50 a share from $17.00 a share. He maintained a “buy” rating.