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.
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."[NLINSERT]
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following company mentioned in this article is a billboard sponsor of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.
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.
Analysts employed outside the U.S. are not registered as research analysts with FINRA. These analysts may not be associated persons of CIBC World Markets Corp. and therefore may not be subject to FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
Potential Conflicts of Interest:
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.
In addition to 1% ownership positions in covered companies that are required to be specifically disclosed in this report, CIBC World Markets Corp./Inc. may have a long position of less than 1% or a short position or deal as principal in the securities discussed herein, related securities or in options, futures or other derivative instruments based thereon.
Recipients of this report are advised that any or all of the foregoing arrangements, as well as more specific disclosures set forth below, may at times give rise to potential conflicts of interest.
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.