Globe article on OSK (May 2016) OSK has “all the ingredients needed to deliver long-term shareholder value,” according to RBC Dominion Securities analyst Dan Rollins. He set a price target of $6.50 for the stock.
“We believe Osisko is well positioned to outperform its exploration stage peers given a potential company-maker in the Windfall gold project, a portfolio of prospective gold projects within key mineralized belts in Quebec/Ontario, a well funded balance sheet and management/board of directors with a demonstrated track-record of advancing projects through exploration to production,” said Mr. Rollins. “These characteristics provide Osisko with the foundation to become a future mid-tier gold producer.
“We expect Osisko's shares to continue to outpace its exploration stage peers as the company carries out a robust in-fill/step-out drill program at Windfall (400,000 metres), tests a number of prospective targets on the greater Urban Barry and Quevillon properties (3,300 square-kilometres) and advances other projects such as Garrison.”
Given the exploration success it has enjoyed at Windfall project in Quebec, which he said is “still on the upslope of the discovery phase” and has “the makings to be a company-maker,” Mr. Rollins expects management to seek to monetize its Marban Block and Garrison projects.
“In our view, Marban and Garrison could offer greater value to other industry players than to Osisko given the potential to leverage existing infrastructure based on the projects’ proximity to other operating assets,” he said. “We see the potential for Garrison to one day be amalgamated into an existing operation in the Timmins camp which could leverage existing infrastructure in the region. Similarly, we believe Marban has the potential to become a future source of feed for hungry mills operating in the Val-d’Or camp.”
“Our Outperform recommendation is premised on our view that Osisko's shares are likely to outpace its exploration stage peers over the next 12 months as drilling continues to expand the mineralized potential of Windfall, drilling firms up continuity of identified zones, and exploration potentially identifies other mineralized zones on the greater Urban Barry and nearby Quevillon properties,” he said, “We expect the outperformance to persist as long as drilling continues to demonstrate meaningful resource upside, investors believe Windfall has not yet reached a critical mass and/or until Windfall begins to transition from the exploration phase to the development phase.”