Osisko Mining to acquire Ontario's Queenston Mining
Canada-based Osisko Mining has signed an agreement to acquire mineral exploration and development company Queenston Mining for $550m.
Under the terms of the transaction, Queenston shareholders will receive 0.611 of an Osisko share for each Queenston share held, implying an offer of C$6.00 per share.
This represents a 45% premium to Queenston's 30-day volume-weighted average price until 9 November 2012.
Pursuant to the transaction, Queenston shareholders will own 12% of Osisko.
Queenston owns the historic Kirkland Lake gold camp with exploration lands spread across 230km² on trend with Osisko's flagship Malartic mine in Canada.
Earlier in February 2012, Queenston completed a Preliminary Economic Assessment on the Upper Beaver project.
Results revealed that the mine could produce 2,000t per day over a ten-year mine life, during which time Upper Beaver is projected to generate a total of 1.1 million ounces of gold at an average rate of 120,000oz a year.
The acquisition expands Osisko's gold development portfolio and offers Queenston access to Osisko's gold production at Canadian Malartic and the existing asset base.
Osisko president and CEO Sean Roosen said, "Osisko has always sought to be a part of camps rather than isolated assets and this transaction provides us with a highly strategic land package in another prolific Canadian gold camp," Roosen added.
Queenston president and CEO Charles Page further added, "We look forward to integrating our team with the Osisko team to create a new leading Canadian mid-tier mining company."
Image: Kirkland Lake has been given the nickname 'the Mile of Gold'. Credit: Town of Kirkland Lake.