Osisko Mining Inc T.OSK

I Don't Like The GFI Deal

[AlwaysLong683]

When I invest in any junior exploration-stage company, I like the end game to be a clean takeout by a miner at a generous premium or sell the shares after a 50% or higher run-up in the share price from the price at which I purchased it.

This 50/50 Joint Venture with GFI at Windfall makes things messy iin my opinion. Looks like OSK shareholders are going to be in it until first pour which will probably be at least two to three years away as OSK only recently filed their environmental impact assessment for the Windfall project at the end of March and will have to wait for government approval. They will also need to obtain all permitting requirements and come to agreements with First Nations communities before proceeding with early works at Windfall in preparation for the actual mine build. Also, according to page 2 of the Appendix from OSK's Feb 23, 2023 Slide Presentation, the NPV of Windfall is only 1.7B CAD at a 1,900 gold (50% of which I assume will be GFI's portion) yet OSK has a current market cap of 1.36B, so not much upside in terms of mine value upon completion. Any other potential economically-sound / profitable project is unknown at this time. 

OSK announced the Windfall partnership with GFI on May 2. OSK closed at 3.77 that day. It closed yesterday at 3.67, and is down over 5% so far today in what has been a decent run for gold companies in general over the past week, so the market is not big on this move, at least so far.

If OSK had insisted on a full takeout of the company instead of the partnership at Windfall, I wonder what GFI or another miner would have offered per share....? If it was a premium of 20% or more to say the 30-day weighted average share price, I would've been happy with that if I was an OSK shareholder.