THOMPSON CREEK’s $1.5bn Mount Milligan copper-gold mine in British Columbia, which hit commercial production in February last year. Photo: Thompson Creek


Royal Gold Expected to Bid for Osisko

Issue 111, January 2015

Continued from Page 1 Macedonia. “Macedonia has had 9 to 11 different flags over Skopje since 1870,” one US-based analyst says. “It hasn’t always been one country. It doesn’t have a navy or airforce. I don’t know if the Serbs took the harbour, but they don’t have much GDP.”

Quebec, conversely, ranks as one of the top mining addresses globally. “Eleonore is a tier one asset,” one investor in Royal Gold says, “which makes the Virginia royalty worth paying up for."


Goldcorp, which said this week that ramp-up at Eleonore will be “strongly weighted” towards the second half of 2015, has previously been linked to a bid for Virginia, which holds a 2 to 3.5 per cent royalty over the mine having discovered the deposit.

“Goldcorp possesses the first-hand geological knowledge on the Eleonore mine,” one analyst says, “so for Goldcorp it would be like a share repurchase. It’s buying what you know, it’s not a crock of [soot] from an investment banker’s deal book.”

The company however would have had to pay a royalty-type premium for Virginia, buying cash flow that would not command the same premium within Goldcorp and reversing the arbitrage that makes royalty and streaming profitable.

“At Play”

Virginia’s merger with Osisko has put “both of us at play to a certain point,” Virginia’s founder Andre Gaumond told a Scotiabank conference last month. “Everything was on the table, everything has been studied for the past 2 years. The board was very prepared for a lot of scenarios and we looked at all of them.”

Under a takeover scenario, Roosen looks well positioned to spin-out the exploration assets of both Osisko and Virginia, leaving him with vast land positions in Mexico and Quebec.

Royal Gold issued a new media policy in response to a request for comment, saying it does not discuss “potential or rumored acquisitions.” Shares in Thompson Creek have meanwhile nosedived to $1.21, off 27 per cent in 5 days. Osisko Gold opened trading on Thursday at $16.70. 

“Everything was on the table…”


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