By The Gold Report
Source: Streetwise Reports 09/11/2018
A CIBC report provided the rationale for adding this Canadian company to its covered stocks.
In a Sept. 5 research note, analyst Bryce Adams reported that CIBC initiated coverage on Osisko Mining Inc. (OSK:TSX) with an Outperformer rating and a price target of CA$2.50 per share. The company is currently trading at around CA$2.34 per share.
Adams reviewed the company’s high-quality merits. One, he said, is that the miner’s Windfall project offers “significant upside well beyond the conservative preliminary economic assessment (PEA)” and CIBC’s base case using spot prices, which offers a NAV5% of CA$318 million.
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Upside at Windfall could come in the form of grade and/or tonnage, explained Adams, both of which are near-term catalysts. “Our NPV5% would increase by roughly 80% in our upside scenario,” Adams indicated.
The way the grade was estimated in the PEA “limited the area of influence of mineralized intersections.” Thus, the additional infill drilling that now is underway could result in a roughly 15% higher resource grade.
As for tonnage, the use of narrower, less than 3.5 meters wide stopes, which were excluded from the PEA, could “nearly double the mineable resource,” Adams noted. Further, exploration drilling would also likely increase its size.
Along with Windfall’s “significant resource upside potential,” Adams noted, its other “high-quality merits” are the moderate risk associated with it and the company’s strong management team and its chances of being taken out, all of which “offer compelling investor appeal.”
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Disclosures from CIBC, Osisko Mining Inc., September 5, 2018
Each CIBC World Markets Corp./Inc. research analyst named on the front page of this research report, or at the beginning of any subsection hereof, hereby certifies that (i) the recommendations and opinions expressed herein accurately reflect such research analyst’s personal views about the company and securities that are the subject of this report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii) no part of the research analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.
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Equity research analysts employed by CIBC World Markets Corp./Inc. are compensated from revenues generated by various CIBC World Markets Corp./Inc. businesses, including the CIBC World Markets Investment Banking Department. Research analysts do not receive compensation based upon revenues from specific investment banking transactions. CIBC World Markets Corp./Inc. generally prohibits any research analyst and any member of his or her household from executing trades in the securities of a company that such research analyst covers. Additionally, CIBC World Markets Corp./Inc. generally prohibits any research analyst from serving as an officer, director or advisory board member of a company that such analyst covers.
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Important Disclosure Footnotes for Osisko Mining Inc. (OSK)
· CIBC World Markets Inc. expects to receive or intends to seek compensation for investment banking services from Osisko Mining Inc. in the next 3 months.
This company is a client for which a CIBC World Markets company has performed investment banking services in the past 12 months.
CIBC World Markets Inc. has managed or co-managed a public offering of securities for this company in the past 12 months.
CIBC World Markets Inc. has received compensation for investment banking services from this company in the past 12 months.
( Companies Mentioned: OSK:TSX,