Osisko Mining Corp.'s name has been thrown around by bankers, analysts and in-the-know mining investors for a few years now, but it still doesn't have a lot of traction with average investors.
Come fall, that could change.
With commercial production expected to be declared later this quarter, Osisko is on the verge of new territory. CIBC World Markets analyst Barry Cooper noted that the company "is set to join the intermediate producer space where attraction of cash flow will cause the shares to be considered by a new and larger group of investors."
The miner's flagship property is the fully owned Canadian Malartic gold project in Quebec. Expecting commercial production shortly, CIBC predicts that Osisko will produce 261,000 ounces during the rest of 2011.
"This size of production enjoys a sweet spot amongst investors who see it large enough to be liquid and meaningful yet small enough to provide future growth," Mr. Cooper noted.
In anticipation of the ramp up, Osisko held a site visit for the financial community at the end of May and it was well attended. Everyone has their eye on the company because it is continually considered to be a takeover target, and even if that acquisition next comes to fruition, Osisko will probably need to raise more money to expand production in the near future.
As for the company's earnings outlook, Mr. Cooper expects it to get even better over the next few years. Although commercial production is a big step, he notes that costs should fall by about $200 per ounce once operations hit full stride. At the moment he predicts these costs to average about $624 per ounce for the rest of 2011.
Tim Kiladze