Quebec's Osisko comes out fighting against Goldcorp bid

Osisko Mining Corp. is calling a hostile takeover bid for the company by Goldcorp Inc. "very low" and opportunistic.

Calls $2.6B offer for gold miner too low and opportunistic

CEO Sean Roosen rejects $2.6-billion Goldcorp deal 5:53

Osisko Mining Corp. is calling a hostile takeover bid for the company by Goldcorp Inc. "very low" and opportunistic.

Company CEO Sean Roosen said Wednesday the Osisko board is continually seeks value for its shareholders.

"We’re shareholders of the company ourselves. We’re focused on shareholder value 365 days a year  and seven days a week. We look at our valuations on a constant basis and so does our board," Roosen said in an interview with CBC's The Lang & O'Leary Exchange. 

"Osisko's board of directors noted that the 15 per cent premium to Osisko's unaffected share price implied by Goldcorp's offer is very low and the price opportunistic in light of Osisko's proven high quality asset base," the company said in a statement.

Osisko urged shareholders to hold off from accepting the $2.6-billion bid until the board, which has formed a special committee including five independent members to review the offer, makes a recommendation on the proposal.

Roosen refused to say what price he would consider acceptable, saying he hopes shareholders are smart enough to hold onto their shares and grow with Osisko.

Osisko shares have traded well above the $5.95 implied value of the Goldcorp offer since the stock-and-cash proposal was first announced on Monday.

Some analysts have suggested that Goldcorp will have to raise its offer if it wants to close the deal.

Osisko shares were up three cents $6.25 in trading on the Toronto Stock Exchange on Wednesday, while Goldcorp was down six cents at $24.28.

Osisko's main asset is the Canadian Malartic gold mine in northern Quebec where it has been ramping up operations since its first commercial production in May 2011.

Roosen pointed out that Osisko has done the groundwork to get the mine in operation, including smoothing tensions in the community and with the Quebec government. Now the mine is facing a long productive life, one reason the company sees Goldcorp's offer as "opportunistic." 

"This offer shows this is an important asset in  he space. This is a number one asset in the gold space by a wide range now. We brought it to value and we’re very good at that," Roosen said.

In addition, Osisko owns the Hammond Reef gold project near Thunder Bay, Ont., and land holdings near Kirkland Lake, Ont.

Goldcorp was once one of the largest shareholders in Osisko, but sold its 10.1 per cent stake in the company in 2011 for $13.75 per share for a total of about $530 million.

Goldcorp CEO Chuck Jeannes said the big gold producer had been in regular discussions with Osisko until late last year.

"We have been working on this for some time. We know the folks at Osisko quite well. We know the asset well. We’ve had numerous conversations...most recently in the fall of last year when they decided to stop any discussions with us. We just decided it was time to let the shareholders decide," he said in an interview Tuesday with CBC's The Lang & O'Leary Exchange.

Jeannes said the deal provides earnings and cash flow potential for his company.

"From a risk standpoint, it’s got very low technical risk because it’s already in production and the ore body is fairly simple and understandable," he said. 

"It’s got low capital risk because the capital’s already been invested – we’ve seen a lot of capital appreciation in our business over the last while – so that’s behind them. And it’s got low political risk," he added.

The acquisition of Osisko would give Goldcorp a key asset in Quebec where the company is building the Eleonore gold mine.

With files from Canadian Press