This miner is expanding and recently Osisko acquired a silver stream from Taseko Mines Ltd. That is valued at 33.0 million Canadian dollars plus a 3 million Canadian dollars warrant.
Osisko Gold (OR)
From Adrian Day’s Global Analyst
Osisko Gold (OR) reported increased revenues, but more important it has acquired a major new asset, a silver stream on the Gibraltar copper mine for C$44 million, and it has seen progress in its “accelerator model” whereby it acquires shares and royalties in early stage projects which it nurtures along.
CEO Sean Roosen advocates that “most wealth is created at the drill bit...the lowest cost place to get a royalty is at the very beginning of the project.” This is a different and somewhat more risky approach than that pursued by most other royalty companies, but Osisko has experienced management and has been successful.
The value of its equity portfolio is around C$341 million, over $130 million above its cost. So—were Osisko to sell its equity—it would be building a portfolio of royalties and being paid to do so.
In all, some 870,000 meters of drilling is planned for this year on ground covered by Osisko’s royalties, while 13%-owned Falco is moving towards a feasibility study on its Horne project.
Osisko arguably should trade at a discount to other large royalty companies given the higher risk in the model, but the discount is too wide right now. With strong, experience management, a solid balance sheet, a significant pipeline inside the company, Osisko is a strong buy at current levels. Some analysts believe that Osisko will be one of those companies reduced when the GDXJ index makes its portfolio adjustments mid-month. Any sell off at that time, would be a time to buy.
Adrian Day, Adrian Day’s Global Analyst, www.adriandayglobalanalyst.com, 410-224-8885, May 30, 2017