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Strategies & Market Trends : Ride the Tiger with CD
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To: dara who wrote (174040)9/8/2009 5:22:01 PM
From: Veteran98  Read Replies (3) of 312654
 
Precious Metals Weekly | 3
8 September 2009
IN THE NEWS LAST WEEK
Goldcorp Continues To Accumulate Position in Osisko
Recent INK Research filings reveal Goldcorp acquired an additional 492,500 shares in
Osisko at $7/share (two transactions in mid-August and on September 1, 2009). While
not very material in relation to Goldcorp pre-existing ownership stake of 33.8 million
shares and 4.3 million warrants, the further accumulation of Osisko stock by Goldcorp
signals increasing interest in the Malartic project by the senior producer. The
transaction tallies Goldcorp's ownership to 12.4% from 12.2% previously (diluted from
12.9% after the recent bought deal by OSK).
This development underscores our already held takeover thesis on Osisko as an
attractive M&A target given the Malartic project’s robust reserve/resource base in a
politically benign jurisdiction. Our Osisko model, which incorporates South Barnat,
reflects an average life of mine production rate of 630,000 oz/yr (585,000 oz/yr
excluding South Barnat). We have production commencing mid-2011. We reiterate our
C$9.50 price target and SPECULATIVE BUY rating on Osisko shares based on a multiple
of 0.9x to our 10%/Peak NAVPS (diluted, $1100/oz Au) estimate of US$17.20, adjusted
for an exchange rate of US$0.90/C$.
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