In a June 21 research note, analyst Bryce Adams reported that CIBC raised its target price on Osisko Mining Inc. (OSK:TSX) to CA$4.50 per share from CA$3.50. In comparison, the company's stock is currently trading at around CA$3.30 per share.
The increased target comes after CIBC visited Osisko's Windfall project in Quebec for the first time on June 20 but before the H2/19 release of the updated resource estimate on it.
One of the key takeaways from the site visit, Adams said, was that it is clear upside exists "well beyond the conservative preliminary economic assessment" that outlined 8.9 million tons (8.9 Mt) at 6.68 grams per ton (6.68 g/t), or 1.9 million ounces (1.9 Moz), in light of a maiden resource of 13 Mt at 6.68 g/t, or 2.9 Moz. Thus, the analyst added, the resource estimate "has the potential to positively influence resource grade and tonnage."
Adams pointed out that the updated resource estimate for Windfall, likely to be released in Q4/19, will encompass a significant amount of infill drilling along with some expansion drilling. Also of note, a single top cut will replace the triple capping used in previous updates. "With this change and infill drilling completed, we see potential for about 15% higher resource grades," he wrote. "Furthermore, we see resource expansion and more detailed mine planning potential with the feasibility study," expected in H2/20.
The other impression of Windfall, Adams noted, was that it was bustling with activity, with about 240 people there, 22 drills running and underground development in progress.
CIBC has an Outperformer rating on Osisko.[NLINSERT]
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Disclosures from CIBC, Osisko Mining Inc., June 21, 2019
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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.