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To: loantech who wrote (222092)11/13/2012 2:26:13 PM
From: Veteran98Read Replies (2) of 236562
 
OSK getting a bounce on earnings ....

Osisko earns $26.15-million in Q3

Ticker Symbol: C:OSK Osisko earns $26.15-million in Q3 Osisko Mining Corp (C:OSK)
Shares Issued 389,511,845
Last Close 11/12/2012 $9.02
Tuesday November 13 2012 - News Release

Mr. Sean Roosen reports

OSISKO REPORTS THIRD QUARTER 2012 RESULTS; MINE OPERATING PROFITS OF $60.1 MILLION, NET PROFIT OF $26.2 MILLION

Osisko Mining Corp. has generated a net profit of $26.2-million (seven cents per share) during the third quarter of 2012 versus a net profit of $9.3-million in the third quarter of 2011 (two cents per share). The higher profitability is attributable to continued progress on the ramp up of the Canadian Malartic mine and improved margins.

Q3 Highlights

    --  Gold production of 103,753 ounces, a new quarterly record;             --  Operating cash flow of $55.4 million;             --  Continued progress on plant ramp up and optimization with record tonnage        mined and milled being achieved; and             --  Cash costs per ounce of C$864. Q4 Preview


    --  Drilling program initiated in Mexico in late October;             --  Record daily mill throughput of 58,476 tonnes achieved in the first week        of November; and             --  Announcement of the friendly acquisition of Queenston Mining Inc. in        November.   


Mine operating profits during the third quarter totaled $60.1 million compared to $38.3 million in the corresponding period in 2011. Record gold production of 103,753 ounces was achieved during the period. Gold production continues to increase quarter-over-quarter with improvements in the milling plant following the installation and commissioning of the two secondary cone crushers, increased availability in the circuit and optimization measures. The table below outlines the steady progress towards achieving design mill throughput rates, rising availability and subsequent increase of gold production.

    ------------------------------------------------------------                     Tonnes per     Availability Gold Production                   Operating Day             (%)            (oz)                ------------------------------------------------    Q3 2012               43,181              94         103,753    Q2 2012               38,074              90          92,003    Q1 2012               35,728              87          91,178    Q4 2011               33,733              90          79,718    Q3 2011               36,742              86          73,814    Q2 2011               29,894              82          46,606    ------------------------------------------------------------


Sean Roosen, President and Chief Executive Officer of Osisko, commenting on the third quarter results: "We continue to focus on ramping up our operations at Canadian Malartic to the 55,000 tonnes per day name plate capacity. We are making very good progress and are increasing our gold output and improving our profit margins. Our cash unit cost decreased by 15% during the period and we continue to benefit from robust gold market".

During the first nine months of 2012, the Canadian Malartic mine generated a net profit of $171.6 million and Osisko a net profit of $68.8 million ($0.18 per share). In 2011, the year-to-date mine operating profits amounted to $39.9 million from commencement of commercial production on May 19, 2011, and the Company incurred a net loss of $19.8 million ($0.05 per share). In addition to the shorter operation period, the 2011 results were impacted by exploration project write-offs and special incentive awards following the completion of the Canadian Malartic Project.

Operating cash flow amounted to $55.4 million for the quarter and $189.8 million for year-to-date, compared to $49.5 million and $46.0 million in the corresponding periods of 2011. Investments in mining assets totaled $189.5 million to date during 2012.

The mine operating statement for the production period is as follows:

    ----------------------------------------------------------------------------                        Q3 2012     Q2 2012     Q1 2012     Q4 2011     Q3 2011                     ------------------------------------------------------------    Gold sales                                                                       (ounces)            95,424      95,675      92,400      75,100      72,100     Silver sales                                                                     (ounces)            49,751      48,880      52,800      42,100      49,800     ----------------------------------------------------------------------------                          ($000)      ($000)      ($000)      ($000)      ($000)                    ------------------------------------------------------------    Revenues            158,503     157,134     158,658     128,100     122,879     ----------------------------------------------------------------------------                                                                                    Production Costs    (81,841)    (98,837)    (71,910)    (74,841)    (74,647)    Royalties            (1,998)     (2,021)     (2,359)     (1,933)     (1,192)    Depreciation        (14,605)    (15,289)    (13,877)    (11,800)     (8,748)                    ------------------------------------------------------------    Total               (98,444)   (116,147)    (88,146)    (88,574)    (84,587)                                                                                                    ------------------------------------------------------------    Net Mining                                                                       Profit              60,059      40,987      70,512      39,526      38,292     ----------------------------------------------------------------------------   


Improvements in unit cost in the quarter compared to the second quarter include:

    i.  Increased throughput and mill efficiencies;             ii. Lower contractors' costs;             iii.Improved mining conditions (second quarter results were impacted by        defective boosters in the blasting cycle); and             iv. Elimination of inefficiencies caused by the May 9, 2012 mill fire;   


Key operating results

(in thousands of Canadian dollars, unless otherwise noted)

    ----------------------------------------------------------------------------                                 Q3 2012   Q2 2012   Q1 2012   Q4 2011   Q3 2011                              --------------------------------------------------    Gold Production (oz)         103,753    92,003    91,178    79,718    73,814    Gold Sales (oz)               95,424    95,675    92,400    75,100    72,100    Average Sale Price                                                               (US$/oz)                      1,659     1,605     1,698     1,655     1,695    Average Market Price                                                             (US$/oz)                      1,652     1,609     1,691     1,688     1,702    Cash Costs per Ounce                                                             (C$/oz)                         864     1,015       860       936       918    Cash Costs per Ounce                                                             (US$/oz)                        867     1,004       858       914       939    Cash Margin per Ounce                                                            (US$/oz)                        792       601       840       741       756    Revenues                     158,503   157,134   158,658   128,100   122,879    Mine Operating Profit         60,059    40,987    70,512    39,526    38,292    Net Earnings                  26,156    13,271    29,359    37,802     9,302    Net Earnings per Share          0.07      0.03      0.08      0.10      0.02    Operating Cash Flows          55,353    55,698    78,716    39,660    49,512    ----------------------------------------------------------------------------   


The production statistics are as follows:

    ----------------------------------------------------------------------------                              Q3          Q2          Q1          Q4          Q3                            2012        2012        2012        2011        2011                    ------------------------------------------------------------    Tonnes Mined                                                                     (000's)                                                                          - Ore                4,853       3,234       4,037       3,549       3,005      - Waste              9,215       9,545       8,458      10,590       7,899      - Overburden         1,409       1,740       1,954       1,823       1,029                    ------------------------------------------------------------    Total                 15,477      14,519      14,449      15,962      11,933    Tonnes Milled                                                                    (000's)               3,757       3,236       2,965       2,935       3,086    Grade (g Au/t)          0.97        0.99        1.05        0.96        0.85    Recovery (%)            88.7        89.2        91.2        88.3        87.0    Gold production                                                                  (oz)                103,753      92,003      91,178      79,718      73,814    ----------------------------------------------------------------------------   


Mining activities in the period were impacted by a delay in executing a blast of 940,000 tonnes over old underground workings, which limited access to higher grade ore. The blast was successfully completed on October 27, 2012.

During October 2012, mill throughput continued to progress with more than 1.53 million tonnes being milled for an average daily throughput rate of 49,361 tonnes per day. Gold production totaled 36,440 ounces. Ore grade was 0.83 g/t, due to constraints in the mining areas as a result of the delayed blast and processing stockpiled ore. Though throughputs continue to increase in October, recoveries remain above feasibility expectations at 88.9%.

In the first eight days of November, the mill processed at an average daily rate of 52,853 tonnes and achieved a record throughput of 58,476 tonnes on November 4, 2012.

Mill operating statistics continue to show progress in all categories.

    ----------------------------------------------------------------------------                     Total                                            Tonnes per                 Available  Operating              Tonnage     Tonnes  Operating                     Hours      Hours    (%)  Produced (t)   per Hour        Day    ----------------------------------------------------------------------------    Q2 2011          2,184      1,793     82     2,481,196      1,384     29,894    Q3 2011          2,208      1,890     86     3,086,324      1,633     36,742    Q4 2011          2,208      1,995     90     2,934,803      1,471     33,733    Q1 2012          2,184      1,890     87     2,965,456      1,569     35,728    Q2 2012          2,184      1,960     90     3,236,281      1,651     38,074    Q3 2012          2,208      2,071     94     3,756,768      1,814     43,181    ----------------------------------------------------------------------------   


Osisko's operating focus for the balance of 2012 will be:

    i.  Complete planned mill modifications with the installation of the second        pebble crusher;             ii. Stabilize the operating circuit to reach steady-state throughput design        capacity of 55,000 tonnes per day;             iii.Improve productivity of the mine;             iv. Focus on optimization of operations and unit cost reduction.    Improved Financial Flexibility


During the second quarter, the Company amended its $150 million credit facility with CPPIB Credit Investments Inc. ("CPPIB"), a wholly-owned subsidiary of the CPP Investment Board, with CPPIB making available to the Company an additional $100 million delayed draw term loan. The key terms of the amendment are as follows:

    --  The initial cash repayment schedule has been extended by one year to        June 30, 2013. The reimbursements are based on 50% of free cash flow up        to $60 million per annum.             --  CPPIB will make available a delayed draw term loan of $100 million for        working capital and general corporate purposes. Osisko may draw funds        under this facility in $20 million increments, and any funds outstanding        are reimbursable by December 31, 2013. No funds were drawn to date on        this facility. There are no standby fees related to this tranche.   


As part of the agreement, Osisko has agreed to reduce the strike price of share purchase warrants to $10 for Tranche A (was previously $10.75) and Tranche B (was previously $19.25). Of the total 12.5 million of warrants, 5.5 million Tranche B warrants can be accelerated at Osisko's discretion if the share price trades at a 50% premium to the exercise price for a period of 15 days. Tranche A warrants expire on September 24, 2014 and Tranche B warrants are set to expire on December 31, 2015.

Osisko made its second installment guarantee payment of $12.7 million to the Quebec Government on October 1, 2012, to fund future estimated closure costs which are estimated at $46.4 million. Total funds deposited with the Government amount to $34.8 million.

Exploration and Development

The Company continues to conduct exploration work on a regional basis around the Canadian Malartic infrastructure for additional resources and reserves. At Hammond Reef, the Company has initiated work necessary for the Project Feasibility Study, which is expected to be completed in late 2012 or early 2013. The Minister of Environment of Ontario has approved the Terms of Reference for the Environmental Impact Assessment.

The Company has also acquired a significant land package in an emerging Mexican gold belt. To date, approximately 1M hectares of ground have been staked. A systematic greenfield exploration program has been completed, and a significant target has been identified following a high density stream sediment survey, detailed mapping, geochemistry and geophysics work. An initial 10,000 meter drill program was initiated in late October.

Proposed Friendly Acquisition of Queenston Mining Inc.

On November 12, 2012, Osisko announced that it had entered into a definitive agreement to acquire, on a friendly basis, all of the issued and outstanding common shares of Queenston Mining Inc. ("Queenston") on the basis of 0.611 of an Osisko common share for each common share of Queenston. Queenston is a Canadian mineral exploration and development company with a primary focus on its holdings in the historic Kirkland Lake gold camp comprising 230km2 of exploration lands. Osisko has entered into lock-up agreements with Queenston insiders and certain significant shareholders representing approximately 30% of the issued and outstanding common shares of Queenston. At the date of announcement, the transaction valued Queenston's equity at approximately $550,000,000, and would result in the issuance of approximately 56,000,000 common shares of Osisko, based on the fully diluted in-the-money common shares outstanding of Queenston, representing approximately 12% of Osisko outstanding common shares, post transaction.

The board of directors of Queenston has unanimously approved the transaction and will recommend that shareholders vote in favor of the transaction. Completion of the transaction, by way of a plan of arrangement, is subject to customary conditions, including court approval, a favourable vote of at least 66 2/3 % of the holders of Queenston common shares and the receipt of all necessary regulatory and stock exchange approvals. Assuming all of the conditions are fulfilled, it is expected the transaction will be completed in late 2012 or early 2013.

Non-IFRS Financial Performance Measures

The Company has included certain non-IFRS measures including "cash cost per ounce" and "cash margin per ounce" to supplement its consolidated financial statements, which are presented in accordance with International Financial Reporting Standards ("IFRS"). Refer to the Company's Management Discussion and Analysis for the three months ended September 30, 2012.

Q3 Conference Call Information

Osisko will host a conference call on Wednesday November 14th at 8:00am EST, where senior management will discuss the financial results and provide an update of the Company's activities. Those interested in participating in the conference call should dial in at (416) 981-9012 (Toronto local and international), or 1-800-909-4792 (North American toll free). An operator will direct participants to the call.

The conference call replay will be available from 10:00 a.m. EST on November 14, 2012 until 11:59 p.m. EST on November 29, 2012 with the following dial in number: (416) 626-4100 or Toll-free 1-800-558-5253, access code 21607972.

Mr. Luc Lessard, Eng., Senior Vice-President and Chief Operating Officer of Osisko, is the Qualified Person who has reviewed this news release and is responsible for the technical information reported herein, including verification of the data disclosed.

Consolidated Statements of Income (Loss)                                        For the three and nine months ended September 30, 2012 and 2011                 (Unaudited)                                                                     ----------------------------------------------------------------------------    (tabular amounts expressed in thousands of Canadian dollars, except per         share amounts)                                                                                                                                                                                   Three months ended       Nine months ended                                           September 30,           September 30,                                 ------------------------------------------------                                       2012        2011        2012        2011                                 ------------------------------------------------                                          $           $           $           $                                                                                     Revenues                        158,503     122,879     474,295     135,308                                                                                     Mine operating costs                                                              Production costs              (81,841)    (74,647)   (252,588)    (84,045)      Royalties                      (1,998)     (1,192)     (6,378)     (1,351)      Depreciation                  (14,605)     (8,748)    (43,771)     (9,986)                                ------------------------------------------------    Earnings from mine                                                               operations                      60,059      38,292     171,558      39,926       General and administrative                                                       expenses                      (7,601)     (6,577)    (20,950)    (24,563)      Exploration and corporate                                                        development expenses          (2,852)     (7,774)     (8,105)    (20,934)      Other expenses                      -           -           -        (485)                                ------------------------------------------------    Earnings (loss) from                                                             operations                      49,606      23,941     142,503      (6,056)      Interest income                   233         454       1,145       1,964       Finance costs                  (7,983)     (6,995)    (22,825)    (10,766)      Foreign exchange gain                                                            (loss)                         3,431      (4,331)      3,160      (2,817)      Share of loss of                                                                 associates                      (353)        (29)       (628)       (480)      Other gains (losses)               82      (1,758)     (2,982)      1,326                                 ------------------------------------------------    Earnings (loss) before                                                           income and mining taxes         45,016      11,282     120,373     (16,829)      Income and mining tax                                                            expense                      (18,860)     (1,980)    (51,587)     (2,976)                                ------------------------------------------------    Net earnings (loss)              26,156       9,302      68,786     (19,805)                                ------------------------------------------------                                ------------------------------------------------                                                                                    Net earnings (loss) per                                                          share                                                                            Basic                            0.07        0.02        0.18       (0.05)      Diluted                          0.07        0.02        0.18       (0.05)   


We seek Safe Harbor.

© 2012 Canjex Publishing Ltd.
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