"How About Merging with Osisko?"
Issue 107, November 2014
This week's C$1.3bn merger between Osisko and Virginia Mines will create “a new mining powerhouse in Quebec,” Virginia's founder and chief executive Andre Gaumond told Global Mining Observer on Tuesday.
“Every time Osisko were doing a presentation everybody was telling them, 'How about merging with Virginia?' Every time I was doing a presentation everybody was telling me, 'How about merging with Osisko?', so I think it was natural to put these two companies together.”
The new company, Osisko Gold Royalties, will be headquartered in Montreal, with Gaumond's team in Quebec City remaining unchanged. “The Virginia name might disappear, but it's just a name. The team stays, all my people stay in the new entity, so we'll continue our mission, which is to explore and find mines in the northern part of Quebec.”
Virginia did not auction itself, Gaumond says, though Osisko's listing in June altered its strategy, allowing the companies to combine and reduce their risk exposure to Eleonore and Malartic respectively, without diluting the quality of either company's asset base.
“Personally, I want to continue doing what I've been doing, which is find mines in northern Quebec and I will maybe have a little more time to evaluate projects that we could acquire, so I'm planning to do a portion of my time in business development.”
New acquisitions will be assessed “case by case,” he says, “but we want to continue to have a good discipline, to acquire things that will make sense. The two royalties we have are exceptional. They are strong royalties on gold deposits located in a safe jurisdiction, operated by the best operators in the world, so it would be crazy to dilute the quality of the assets that we have.”
“Of course,” larger royalty groups will see the new group as “a possible target”, Gaumond says, “but we're not merging to disappear, we're merging to create a new powerhouse.”
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