Transaction analysis goldcorp and osisko

Analysis Summary
Morrison Park Advisors’ analysis of the transaction to acquire Osisko, as proposed by Goldcorp, concludes that it would
have the following impacts to the shareholders of Osisko from a financial point of view.
•

Reduced leverage to Gold
• Osisko shareholders will represent only 7% of Goldcorp after the transaction.
• Osisko’s metal content will go from 100% precious metals to only 78% precious metals and 22% base metals.

•

Reduced metal value per share
• At current commodity prices Osisko has Proven & Probable (P&P) reserves with a gross metal value of $26/share
• The P&P metal value would fall to $24/share pro-forma a transaction with Goldcorp representing 5% dilution to
Osisko shareholders.
• Measured & Indicated (M&I) resources (inclusive of P&P), currently have a gross metal value of $54/share.
• The P&P metal value would fall to $34/share pro-forma a transaction with Goldcorp representing 36% dilution to
Osisko shareholders.

•

Dilutive on an EBITDA basis
• On an attributable EBITDA per share basis (adjusting for debt net of cash), Osisko generated $0.51/share over the 12
months ending September 30, 2013.
• On a pro-forma basis, the transaction would reduce this to $0.48/share equating to 5% dilution for Osisko
shareholders.
• Alternatively, based on annualizing Osisko’s third quarter EBITDA, the company would generate $0.48/share on a
stand-alone basis.
• Pro-forma a Goldcorp transaction, Osisko shareholder’s would effectively be diluted to $0.25/share on an annualized
EBITDA basis reflecting 48% dilution.

MPA Morrison Park Advisors

Page 1 of 6

14/01/2014

TRANSACTION ANALYSIS
Market Statistics
Share Price (Jan 10/14)
Shares Outstanding (1)
Market Capitalization
- Cash + Investments (1)
+ Debt & Convertibles
= Enterprise Value
= Enterprise Value
In-the-money Options:
Amount
Wt Avg Price
Cash from options
In-the-money Warrants:
Amount
Wt Avg Price
Cash from warrants

Goldcorp

Osisko

NewCo

C$

25.29

5.17

25.29

M

812
20,542
1,074
2,590
22,058
20,302

445
2,300
147
329
2,481
2,284

877
22,184
216
2,919
24,886
22,906

C$M
C$M
C$M
C$M
US$M

5.7
4.52
26

M
C$
C$M

-

M
C$
C$M

Top Holders
Goldcorp
Goldcorp
Blackrock
Van Eck
First Eagle
TD Bank
Royal Bank
Osisko (other than included above)
Bank of Nova Scotia
Eurasia
Caise de Depot
Tocqueville
IG Investment

Osisko

0.8
30.98
26
-

Transaction Assumptions
Offer Premium for Osisko
Offer Price for Osisko shares
Equity per share
Cash per share
Total per share
Total Equity
Total Cash
Total Equity and Cash

1.2%
9.3%
1.6%
0.5%
2.1%
7.6%
7.5%
4.4%
3.7%
2.5%

C$
C$
C$M
C$M
C$M

Goldcorp Shares Issued to Osisko
Pro-forma NewCo Shares O/S

0.146
65
877

M
M

Pro-forma Ownership
Market Capitalization
7%

Enterprise Value

4.8%
3.8%
3.5%
2.3%
1.6%

20,542.0

8%

1,641.72

21,052.1

10.9%
9.2%
4.4%
3.4%
3.9%

1.0%
0.0%
1.4%
0.5%
0.4%

3.69
2.26
5.95
1,642
1,005
2,647

C$

Exchange Ratio (Goldcorp shares for every Osisko share)

Pro-forma
NewCo

11.2%
4.8%
3.9%
3.4%
3.1%

15%

1,822.88
Goldcorp

Goldcorp

Osisko

Osisko
92%

93%

Current X-rate and Commodity Prices
X-Rate
Gold
Silver

C$/US$
US$/oz
US$/oz

1.0865
1,251
20.37

Lead
Zinc
Copper

US$/lb
US$/lb
US$/lb

0.97
0.93
3.32

(1) Includes in-the-money options and warrants


Page 2 of 6

14/01/2014

Mineral Resources

Goldcorp

Effective Equity Interest

Osisko

100%

P&P

Proforma Goldcorp

100%

M&I

Inferred

Total

P&P

M&I

Inferred

Total

P&P

M&I

Inferred

Total

Tonnage
Tonnes (100%)

M mt

2,599

1,126

1,042

4,768

311

409

248

967

2,910

1,535

1,290

5,735

g/mt

0.80
14
0.10
0.24
0.10

0.71
10
0.07
0.22
0.04

0.77
3
0.02
0.03
0.16

0.78
11
0.1
0.2
0.10

1.01
-

0.85
-

0.77
-

0.88
-

0.82
12
0.09
0.22
0.09

0.75
8
0.05
0.16
0.03

0.77
3
0.01
0.03
0.13

0.79
9
0.1
0.2
0.08

67
1,160
5,814
13,961
5,758

26
374
1,789
5,395
955

26
111
384
788
3,762

119
1,646
7,987
20,144
10,475

27

77
1,160
5,814
13,961
5,758

37
374
1,789
5,395
955

32
111
384
788
3,762

146
1,646
7,987
20,144
10,475

Grade
Gold
Silver
Lead
Zinc
Copper

g/mt
%
%
%

Contained Metal
Gold
Silver
Lead
Zinc
Copper

M ozs
M ozs
M lbs
M lbs
M lbs

10
-

6
-

-

Osisko Metal Content

Goldcorp Metal Content
Goldcorp Metal Content
148,694
14%
Gold
33,524
7,733
8%
Silver
18,748
3%
Lead
34,766
61%
Zinc
14%

0%

NewCo Metal Content

Osisko Metal Content
34,277
Gold
Silver
-

Lead
Zinc
Copper

Copper


11
-

12%

7%
3%
12%

NewCo Metal Content
182,971
33,524 Gold
7,733 Silver
18,748 Lead
34,766
Zinc
66%
Copper

100%

Page 3 of 6

14/01/2014

Resource Accretion / Dilution

Goldcorp

Osisko

NewCo

Goldcorp
Osisko
NewCo
Proven & Probable
Measured & Indicated

Proven & Probable

Goldcorp

Osisko

NewCo

Total

Gross Metal Value
Gold
Silver
Lead
Zinc
Copper
Total Metal

US$M
US$M
US$M
US$M
US$M

83,917
23,637
5,629
12,994
19,111
145,288

12,635
12,635

96,552
23,637
5,629
12,994
19,111
157,923

116,268
31,257
7,361
18,015
22,280
195,180

26,646
26,646

142,914
31,257
7,361
18,015
22,280
221,827

148,694
33,524
7,733
18,748
34,766
243,465

34,277
34,277

182,971
33,524
7,733
18,748
34,766
277,743

Relative Contribution
Total Metal
Enterprise Value
Difference

92.0%
92.0%
0.0%

8.0%
8.0%
0.0%

812
872

445
494

167
167

88.0%
92.0%
4.0%

26
24

12.0%
8.0%
-4.0%

812
872

445
494

224
235

87.7%
92.0%
-4.4%

54
34

Metal Value per share
Shares Outstanding
Shares Adjusted (2)
Total Metal Value
Pro-forma Tansaction

M
M

US$/sh
US$/sh

Accretion / Dilution
Metal / Share

877
944

Goldcorp
Osisko
0.4%
-4.6%

Goldcorp

877
944

Goldcorp
Osisko
NewCo
812
445
877
872
494
944
279
294

Osisko
5%

12.3%
8.0%
4.4%

Goldcorp
-36%

69
43
Osisko

5%

-38%

EV/Resource Multiple
Gold Equiv. (at market)
US$/oz
Gold Equiv. (at offer Price) US$/oz

175
175

226
258

181

130
130

107
122

129

104
104

83
95

103

(2) Shares outstanding are adjusted by issuing an amount, at market price, required to eliminate all debt net of cash.


Page 4 of 6

14/01/2014

Goldcorp

Financial Assumptions

Osisko

NewCo

Goldcorp Osisko

Financial Assumptions

Adjusted EBITDA (3)

NewCo

Gold Sold

3rd Quarter 2013

US$M

346

59

405

2nd Quarter 2013
1st Quarter 2013
4th Quarter 2012
Last 12 months
3rd Quarter 2013 Annualized

US$M

291
451
1,786
2,874
1,384

43
60
88
251
236

334
511
1,874
3,125
1,620

US$M
US$M
US$M
US$M

3rd Quarter 2013

652

123

775

2nd Quarter 2013
000 oz
1st Quarter 2013
000 oz
4th Quarter 2012
000 oz
Last 12 months
000 oz
000 oz

EV / EBITDA

000 oz

624
595
645
2,517
2,608

110
96
111
439
493

734
691
756
2,956
3,101

531
466
758
2,769
1,142

479
396
631
791
570

522
456
740
2,478
1,057

531

479

522

EBITDA per oz Gold Sold

Last 12 months

X
X

7.06
14.67

9.12
9.68

7.33
14.14

3rd Quarter 2013
2nd Quarter 2013
1st Quarter 2013
4th Quarter 2012
Last 12 months

EBITDA per adjusted share
Last 12 months

US$/sh

3.30

0.51

Pro-forma Transaction

US$/sh

3.31

0.48

Pro-forma Transaction

US$/sh

1.59
1.72

US$/oz
US$/oz
US$/oz

0.48
0.25

0.4%
8%

US$/oz

-5%
-48%

US$/sh

US$/oz

US$/oz

Accretion / Dilution
Last 12 months

(3) EBITDA has been adjusted for other non-cash items not related to operations.

Adjusted EBITDA

$ millions

EBITDA per oz Gold Sold

$ / oz

2,000

3,000
2,500
2,000
1,500
1,000
500
-

1,500
1,000
500
4th Quarter
2012

1st Quarter
2013
Goldcorp


2nd Quarter
2013

4th Quarter
2012

3rd Quarter
2013

1st Quarter
2013
Goldcorp

Osisko

Page 5 of 6

2nd Quarter
2013

3rd Quarter
2013

Osisko

14/01/2014

Disclosures
The content in this document is provided as general information only and should not be taken as investment advice. All, or any, information in this
document shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or
investment strategy, or to vote in favour or against a transaction, or to tender or not to tender into a transaction. The analysis and ideas expressed in
this document is based solely on public information and the opinions of the author and do not necessarily represent the opinions of sponsors or firms
affiliated with the author. The author may or may not have a position in any company referenced in this document. Any action that you take as a result
of information, or analysis in this document is ultimately your responsibility. The author’s opinions are subject to change without notice. This
document is for informational purposes only and should not be considered as investment advice or a recommendation of any particular security,
strategy or investment product. The charts and comments are only the author’s view and aren’t recommendations to buy or sell any security. All
material presented herein is believed to be reliable but we cannot attest to its accuracy. The information contained herein (including historical prices
or values) has been obtained from sources that are considered to be reliable; however, we make no representation as to, or accepts any
responsibility or liability for, the accuracy or completeness of the information contained herein or any decision made or action taken by you or any
third party in reliance upon the data and analysis. Opinions expressed in this document may change without prior notice. No representation is made
that the information and analysis in this document is accurate or complete. This document is not an offer to buy or sell or a solicitation of an offer to
buy or sell the securities mentioned. This information is based on hypothetical assumptions and is intended for illustrative purposes only.


Page 6 of 6

14/01/2014

Transaction analysis goldcorp and osisko

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