MONTREAL - Osisko Mining Corp. (TSX:OSK), which is fighting a hostile takeover attempt by Goldcorp. Inc. (TSX:G), says costs are going down and production is rising at its Canadian Malartic mine in northern Quebec.
The Montreal-based company said Thursday that cash costs per ounce at its only producing mine are estimated at between C$580 and $635 this year, down as much as 24 per cent from last year. Cash costs in U.S. dollars for 2014 were estimated at US$527 to US$577 per ounce.
Capital expenditures for 2014 are expected total C$148.0 million, including $125.8 million at Canadian Malartic. It also has been exploring a property near Kirkland Lake, in northeastern Ontario.
Osisko president and chief executive Sean Roosen said Canadian Malartic is an "exceptional asset and we need to make sure it gets paid for."
"In a sector that is seeing increased cash costs, Canadian Malartic is one of the few mines that's actually coming down in costs," Roosen told a conference call with financial analysts.
The updated mine plan came as Osisko said it expected to produce between 525,000 to 575,000 ounces of gold this year, up from 475,277 ounces in 2013.
Montreal-based Osisko has said repeatedly the Goldcorp offer, worth about $2.9 billion, doesn't adequately recognize the potential for its mine in northwestern Quebec or risk inherent with Goldcorp's stock.
Osisko shares have traded well above the implied value of the Goldcorp offer since the bid was first announced.
Roosen said Thursday that average gold production at its flagship project over the next five years is expected to be 610,000 ounces per year at cash costs of US$516 per ounce
For the 14.2-year life of the mine, gold production is expected to average 597,000 ounces per year at cash costs of US$525 per ounce.
Osisko's main asset is the Canadian Malartic gold mine, northwest of Val D'Or, Que., where it has been ramping up operations since its first commercial production in May 2011.
Goldcorp chief executive Chuck Jeannes has said Canadian Malartic would rank among his companies' best operations if the takeover is successful.
Goldcorp agreed earlier not to take up and pay for any Osisko shares under its offer until April 15, while Osisko agreed to waive its shareholder rights plan by April 14.
Osisko also agreed to provide Goldcorp with access to due diligence materials starting April 1, or earlier, if it signs a deal with another bidder.
Under terms of the offer, Osisko shareholders are entitled to receive 0.146 of a Goldcorp common share plus $2.26 in cash for each Osisko common share.
Shares in Osisko were unchanged at $7.59 on Thursday, while Goldcorp shares were off four cents at $29.96, making the current implied value of the offer about $6.63 per share.