News Column

Osisko Reports First Quarter 2014 Results

May 14, 2014

MONTREAL, QUEBEC--(Marketwired - May 14, 2014) - Osisko Mining Corporation (the "Company" or "Osisko") (TSX:OSK)(FRANKFURT:EWX) today reported net earnings of $24.2 million ($0.06 per share) for the first quarter of 2014 compared to $17.4 million ($0.04 per share) for the corresponding period of 2013. The Company generated cash flows from operating activities of $91.9 million during the first quarter of 2014 compared to $62.5 million in the first quarter of 2013. Q1 Highlights -- Record gold production of 140,029 ounces at operating cash costs(1) of US$577 per ounce (C$636 per ounce); -- Earnings from Canadian Malartic of $77.6 million; -- Operating cash flows of $91.9 million; -- Net earnings of $24.2 million or $0.06 per share; -- Investment of $32.9 million in mining assets and projects; -- Increased cash and cash equivalents by $47.6 million; -- Cash resources now stand at $258.1 million(2); -- Repayment of $10.3 million in debt; -- Net debt position(3) of $64.0 million at March 31, 2014; -- Average grade milled of 1.13 g/t; -- Updated life of mine plan for Canadian Malartic: average annual gold production of 597,000 ounces at US$525 per ounce; -- Discovery of "Canadian Kirkland" gold zone on Kirkland property; -- Discovery of "Odyssey North" and "Odyssey South" gold zones at Canadian Malartic; -- Agreement with Yamana Gold Inc. and Agnico Eagle Mines Limited for the sale of 100% of the issued and outstanding common shares of Osisko for an implied price of $8.15 per common share.



April 2014 Update

-- Monthly gold production in April 2014 of 37,008 ounces despite shutdown for planned maintenance, exceeding budget by 19%. (1) Refer to the non-IFRS measures provided under the Non-IFRS Financial Performance Measures section of the Management and Discussion Analysis. (2) Includes cash and cash equivalents and restricted cash. (3) Gross long-term debt (long-term debt excluding unamortized debt issuance costs and accretion) less cash and cash equivalents and restricted cash.



Sean Roosen, President and Chief Executive Officer commenting on the first quarter results: "We are extremely proud of our team for delivering record quarterly gold production and financial results, particularly during a difficult time for all of our employees. Canadian Malartic has continued to progress into one of the top performing gold mines in the world. We generated $91.9 million in operating cash flow and increased our cash balances by $47.6 million." The mine operating statement for the production period is as follows:

---------------------------------------------------------------------------- 2014 2013 ------------------------------------------------------------ Q1 Q4 Q3 Q2 Q1 ------------------------------------------------------------ Gold sales (ounces) 146,132 136,826 123,151 109,503 95,511 Silver sales (ounces) 141,817 106,907 117,750 95,205 73,683 ---------------------------------------------------------------------------- ($000) ($000) ($000) ($000) ($000) ------------------------------------------------------------ Revenues 212,131 185,774 171,298 159,195 159,381 ---------------------------------------------------------------------------- Production costs (96,586) (94,876) (92,265) (90,619) (81,422) Royalties (2,729) (2,422) (2,144) (2,274) (1,992) Depreciation (35,205) (34,791) (37,902) (23,683) (20,982) ------------------------------------------------------------ Total (134,520) (132,089) (132,311) (116,576) (104,396) ---------------------------------------------------------------------------- Earnings from mine operations 77,611 53,685 38,987 42,619 54,985 ----------------------------------------------------------------------------



Cash flows and earnings generated from the Canadian Malartic mine were higher in the first quarter of 2014 as a result of record production and sales despite lower realized average prices. In the first quarter of 2014, 140,029 ounces of gold were produced and 146,132 ounces were sold compared respectively to 106,047 ounces and 95,511 ounces in the first quarter of 2013.

Key operating results

(in thousands of Canadian dollars, unless otherwise noted)

---------------------------------------------------------------------------- Q1 Q4 Q3 Q2 Q1 2014 2013 2013 2013 2013 -------------------------------------------------------- Gold production (oz) 140,029 137,321 120,208 111,701 106,047 Gold sales (oz) 146,132 136,826 123,151 109,503 95,511 Average sale price (US$/oz) 1,294 1,275 1,321 1,396 1,627 Average market price (US$/oz) 1,293 1,276 1,326 1,415 1,632 Cash costs per ounce(4) (C$/oz) 636 713 754 781 804 Cash costs per ounce(4),(5) (US$/oz) 577 679 726 765 798 Cash margin per ounce(4),(5) (US$/oz) 717 596 595 631 829 Revenues 212,131 185,774 171,298 159,195 159,381 Earnings from mine operations 77,611 53,685 38,987 42,619 54,985 Net earnings (loss) 24,241 10,488 9,755 (492,762) 17,416 Net earnings (loss) per share 0.06 0.02 0.02 (1.13) 0.04 Operating cash flows 91,867 72,476 70,665 55,947 62,478 ---------------------------------------------------------------------------- (4) Refer to the non-IFRS measures provided under the Non-IFRS Financial Performance Measures section of the Management and Discussion Analysis. (5) Using the average exchange rate.



The ramp up of the mill was completed in the second half of 2013, and optimization work to continue to seek throughput efficiencies was ongoing during the first quarter. The mine generated earnings of $77.6 million during the quarter, compared to $55.0 million in the corresponding period in 2013. The increase in profitability is due to a 53% increase in gold ounces sold over the comparative period as well as reduced production costs on a per ounce basis.

During the quarter, approximately 319 equipment hours (0.3% of available hours) were lost due to noise and weather constraints, compared to 1,510 equipment hours (1.4% of available hours) in the first quarter of 2013 and 7,670 (6.3% of available hours) equipment hours in the fourth quarter of 2013.

The production statistics are as follows:

---------------------------------------------------------------------------- Q1 2014 Q4 2013 Q3 2013 Q2 2013 Q1 2013 ------------------------------------------------------- Tonnes Mined (000's) - Ore 4,456 4,906 4,423 3,604 4,091 - Waste(6) 11,189 9,907 11,335 10,010 10,158 ------------------------------------------------------- Total Mined 15,645 14,813 15,758 13,614 14,249 Overburden 763 160 305 871 1,783 Tonnes Milled (000's) 4,363 4,648 4,683 4,444 4,234 Grade (g Au/t) 1.13 1.04 0.90 0.87 0.88 Recovery (%) 88.2 88.6 89.2 89.7 88.0 Gold production (oz) 140,029 137,321 120,208 111,701 106,047 ----------------------------------------------------------------------------



Altough mining activities during the quarter were negatively affected by difficult weather conditions (extreme cold) resulting in equipment failure, tonnes moved averaged at a record of 190,000 compared to 176,000 in Q4 2013 and Q1 2013. Also, mining activities continue to be affected by challenging conditions due to operating close to an urban area.

Production in the first quarter of 2014 averaged 50,444 tonnes per operating day compared to 54,043 tonnes per operating day in the previous quarter and 48,667 tonnes per operating day in the first quarter of 2013. the Canadian Malartic team continues to work on improving the mill throughput and enhancing operating efficiencies.

(6) Including topographic drilling of 1.2 million tonnes in 2014 and 4.9 million tonnes for the year 2013.



Mill operating statistics continue to show progress in all categories.

---------------------------------------------------------------------------- Total Tonnage Tonnes per Tonnes per Available Operating Processed Operating Operating Hours Hours (%) (t) Hour Day ---------------------------------------------------------------------------- Q1 2014 2,160 2,042 95 4,363,365 2,137 50,444 Q4 2013 2,208 2,054 93 4,647,677 2,263 54,043 Q3 2013 2,208 2,061 93 4,682,530 2,272 54,133 Q2 2013 2,184 2,014 92 4,444,042 2,207 52,592 Q1 2013 2,160 2,082 96 4,234,001 2,033 48,667 Q4 2012 2,208 2,052 93 4,088,021 1,992 47,535 Q3 2012 2,208 2,071 94 3,756,768 1,814 43,181 Q2 2012 2,184 1,960 90 3,236,281 1,651 38,074 Q1 2012 2,184 1,890 87 2,965,456 1,569 35,728 ----------------------------------------------------------------------------



Operating Costs

Cash costs per ounce(7) for the first quarter of 2014 stood at US$577 (C$636), compared to US$798 (C$804) in the corresponding period of 2013. The improvement is mainly the result of increased throughput and gold production, improved efficiencies and reduction in contractors' costs. As the operations at Canadian Malartic are further optimized, the operating costs should continue their downward trend.

The Company continues to pursue operating efficiencies, and has intensified its cost optimization program as the operations are now at near name plate capacity.

Investments

The Company invested $32.9 million in property, plant and equipment during the first quarter. These investments were mainly focused on the Canadian Malartic mine (stripping costs, sustaining capital and expansion) and the Kirkland Lake and Upper Beaver exploration projects.

In February the Company announced a capital budget for 2014 of $148 million. The Company remains on track to meeting its capital expenditure guidance for the year.

Liquidity and Capital Resources

As at March 31, 2014, the Company's cash and cash equivalents and restricted cash amounted to $258.1 million compared to $210.5 million as at December 31, 2013, as summarized below:

(In thousands of dollars) March 31, 2014 December 31, 2013 Cash and cash equivalents 209,028 161,405 Restricted cash Current 560 560 Non-current 48,490 48,490 ------------------------------------ 258,078 210,455

During the first quarter of 2014, Osisko reduced its debt by $10.3 million.

(7) Refer to the non-IFRS measures provided under the Non-IFRS Financial Performance Measures section of the Management and Discussion Analysis.



2014 Outlook

Mill throughput is expected to stabilize at approximately 55,000 tonnes per day in 2014 with the completion of optimization programs currently in progress. Together with increased contribution from higher grade material in the now accessible northern pit wall, it is anticipated that gold production for the current year will increase to between 525,000 to 575,000 ounces (an increase of 11% to 21% over record 2013 production of 475,277 ounces gold).

Cash costs per ounce are estimated between $580 and $635, a 24% to 16% reduction in costs from 2013. Cash costs per ounce in US dollars are estimated at US$527 to US$577 using an exchange rate of 1.10.

Capital expenditures for 2014 are estimated at $148.0 million:

---------------------------------------------------------------------------- (In millions Canadian of dollars) ---------------------------------------------------------------------------- Canadian Malartic 125.8 ---------------------------------------------------------------------------- Exploration and evaluation - capitalized 22.2 ---------------------------------------------------------------------------- Capital Expenditures 148.0 ----------------------------------------------------------------------------



Acquisition Agreement with Yamana and Agnico Eagle

On April 16th, 2014, Osisko announced that it had entered into an agreement pursuant to which Yamana and Agnico Eagle will jointly acquire 100% of Osisko's issued and outstanding common shares for total consideration of C$3.9 billion or C$8.15 per share. The total offer consists of approximately C$1.0 billion in cash, C$2.3 billion in Yamana and Agnico Eagle shares, and creation of a new company ("New Osisko") with an implied value of approximately C$575 million.

Terms of the Agreement

Under the Agreement, Yamana and Agnico Eagle will form a joint acquisition entity (with each company owning 50%) which will acquire, by way of a plan of arrangement (the "Arrangement"), all of the outstanding common shares of Osisko. Upon closing of the transaction, Yamana and Agnico Eagle will each own Osisko, and will form joint committees to operate the Canadian Malartic Mine in Quebec. The partners will also jointly explore and potentially develop the Kirkland Lake assets, and continue the exploration at Hammond Reef, Pandora/Wood, and Pandora properties, all located in Ontario.

Upon implementation of the Agreement, each outstanding common share of Osisko will be exchanged for:

i. C$2.09 in cash; ii. 0.26471 of a Yamana common share (a value of C$2.43 based on the closing price of C$9.18 for Yamana shares on the Toronto Stock Exchange as of April 15, 2014); iii.0.07264 of an Agnico Eagle common share (a value of C$2.43 based on the closing price of C$33.45 for Agnico Eagle shares on the Toronto Stock Exchange as of April 15, 2014); iv. one new common share of New Osisko with a value of C$1.20 per share.



Pursuant to Arrangement, certain assets of Osisko will be transferred to New Osisko, the shares of which will be distributed to Osisko shareholders as part of the consideration. The following will be transferred to New Osisko:

i. a 5% net smelter return royalty ("NSR") on the Canadian Malartic mine; ii. a 2% NSR on all existing exploration properties including Kirkland Lake, Hammond Reef, Pandora/Wood and Pandora assets; iii.C$155 million cash; iv. all assets and liabilities of Osisko in the Guerrero camp; v. other investments.



The total value of the transaction is estimated at $3.9 billion, or C$8.15 per common share of Osisko on a fully diluted basis. Following the completion of the transaction, Osisko shareholders will own approximately 14% of Yamana and approximately 17% of Agnico Eagle.

Annual & Special Shareholders Meeting

Osisko's Annual and Special meeting will be held on May 30, 2014 at 1:30pm at the Fairmont Queen Elizabeth Hotel in Montreal. Shareholders are invited to approve the Plan of Arrangement for the Yamana and Agnico Eagle transaction.

Outstanding Share Data

As of May 14, 2014, 440,613,953 common shares were issued and outstanding. A total of 19,518,387 common share options were outstanding to purchase common shares under the Company's share option plan and 12,500,000 common share purchase warrants were outstanding.

Q1 Conference Call Information

Osisko will host a conference call on Thursday, May 15, 2014 at 9:00 am EDT, where senior management will discuss the financial results and provide an update of the Company's activities. Those interested in participating in the conference call should dial in approximately five to ten minutes before the start of the conference to allow ample time to access at 1-(647) 788-4922 (Toronto local and international), or 1-(877) 223-4471 (North American toll free). An operator will direct participants to the call.

The conference call replay will be available from 12:00 pm EDT on May 15, 2014 until 23:59 EDT on May 30, 2014 with the following dial in number: 1-(800) 585-8367, access code 27969500.

Non-IFRS Financial Performance Measures

The Company has included certain non-IFRS measures including "cash costs per ounce" and "cash margin per once" to supplement its consolidated financial statements, which are presented in accordance with IFRS.

The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. Non-IFRS measures do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures employed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

A reconciliation of non-IFRS financial performance measures is available in the Management's Discussion and Analysis for the three months ended March 31, 2014, under the section Non-IFRS Financial Performance Measures.

About Osisko Mining Corporation

Osisko Mining Corporation operates the Canadian Malartic Gold Mine in Malartic, Quebec and is pursuing exploration on a number of properties in Ontario and Mexico.

Mr. Luc Lessard, Eng., Senior Vice-President and Chief Operating Officer of Osisko, is the Qualified Person who has reviewed this news release and is responsible for the technical information reported herein, including verification of the data disclosed.

Forward-Looking Statements

Certain statements contained in this press release may be deemed "forward-looking statements". All statements in this release, other than statements of historical fact, that address events or developments that Osisko expects to occur, are forward looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential", "scheduled" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur including, without limitation, the improvement and stabilization of mill throughput, the completion of optimization programs and the enhancing of operating efficiencies, the decrease of costs and increase of grade and gold production, the continuation and success of exploration activities or the development of projects, the satisfaction of all technical, economical, regulatory and financial conditions in order to complete the Arrangement between Osisko, Agnico Eagle and Yamana, and the realization of all expected benefits of this Arrangement. Although Osisko believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements.

Factors that could cause the actual results to differ materially from those in forward-looking statements include gold prices, access to skilled consultants, mining development and construction personnel, results of exploration and development activities, Osisko's limited experience with production and mining operations, uninsured risks, regulatory framework and changes, defects in title, availability of personnel, materials and equipment, timeliness of government approvals, actual performance of facilities, equipment and processes relative to specifications and expectations, unanticipated environmental impacts on operations market prices, continued availability of capital and financing and general economic, market or business conditions. These factors are discussed in greater detail in Osisko's most recent Annual Information Form and in the most recent Management Discussion and Analysis filed on SEDAR, which also provide additional general assumptions in connection with these statements. Osisko cautions that the foregoing list of important factors is not exhaustive. Investors and others who base themselves on forward-looking statements should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. Osisko believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release.

Osisko Mining Corporation Consolidated Balance Sheets (Unaudited) ---------------------------------------------------------------------------- (tabular amounts expressed in thousands of Canadian dollars) March 31, December 31, 2014 2013 -------------------------------- ($) ($) Assets Current assets Cash and cash equivalents 209,028 161,405 Restricted cash 560 560 Accounts receivable 26,368 24,552 Inventories 72,203 79,247 Prepaid expenses and other assets 25,419 24,260 -------------------------------- 333,578 290,024 Non-current assets Restricted cash 48,490 48,490 Investments in associates 3,251 3,557 Other investments 9,834 8,998 Property, plant and equipment 1,871,232 1,870,932 -------------------------------- 2,266,385 2,222,001 -------------------------------- -------------------------------- Liabilities Current liabilities Accounts payable and accrued liabilities 72,515 78,967 Current portion of long-term debt 75,554 71,794 Provisions and other liabilities 7,100 6,913 -------------------------------- 155,169 157,674 Non-current liabilities Long-term debt 235,492 245,157 Provisions and other liabilities 21,668 18,499 Deferred income and mining taxes 92,812 69,603 -------------------------------- 505,141 490,933 -------------------------------- Equity attributable to Osisko Mining Corporation shareholders Share capital 2,064,857 2,060,810 Warrants 20,575 20,575 Contributed surplus 76,865 75,626 Equity component of convertible debentures 8,005 8,005 Accumulated other comprehensive income 665 16 Deficit (409,723) (433,964) -------------------------------- 1,761,244 1,731,068 -------------------------------- 2,266,385 2,222,001 -------------------------------- -------------------------------- Osisko Mining Corporation Consolidated Statements of Income For the three months ended March 31, 2014 and 2013 (Unaudited) ---------------------------------------------------------------------------- (tabular amounts expressed in thousands of Canadian dollars, except per share amounts) 2014 2013 -------------------------------- ($) ($) Revenues 212,131 159,381 Mine operating costs Production costs (96,586) (81,422) Royalties (2,729) (1,992) Depreciation (35,205) (20,982) -------------------------------- Earnings from mine operations 77,611 54,985 General and administrative expenses (18,668) (7,387) Exploration and evaluation expenses (2,568) (3,079) Write-off of property, plant and equipment (2,220) (2,024) -------------------------------- Earnings from operations 54,155 42,495 Interest income 692 458 Finance costs (6,249) (7,891) Foreign exchange loss (2,949) (2,281) Share of loss of associates (306) (121) Other gains (losses) 2,107 (1,979) -------------------------------- Earnings before income and mining taxes 47,450 30,681 Income and mining tax expense (23,209) (13,265) -------------------------------- Net earnings 24,241 17,416 -------------------------------- -------------------------------- Net earnings per share Basic 0.06 0.04 Diluted 0.05 0.04 Weighted average number of common shares outstanding (in thousands) Basic 439,546 436,502 Diluted 441,906 436,943 Osisko Mining Corporation Consolidated Statements of Cash Flows For the three months ended March 31, 2014 and 2013 (Unaudited) ---------------------------------------------------------------------------- (tabular amounts expressed in thousands of Canadian dollars) 2014 2013 -------------------------------- ($) ($) Operating activities Net earnings 24,241 17,416 Adjustments for : Interest Income (692) (458) Share-based compensation 1,654 1,796 Depreciation 35,455 21,199 Finance costs 6,249 7,891 Write-off of property, plant and equipment 2,220 2,024 Unrealized foreign exchange loss 3,180 1,962 Deferred gain - premium on flow-through shares (2,061) - Provisions and other liabilities, net of settlements 4,367 (114) Income and mining tax expense 23,209 13,265 Other non-cash items 142 2,091 -------------------------------- 97,964 67,072 Change in non-cash working capital items (6,097) (4,594) -------------------------------- Net cash flows provided by operating activities 91,867 62,478 -------------------------------- Investing activities Net decrease in short-term investments - 19,357 Net decrease in restricted cash - 4,005 Proceeds on disposal of investments 50 - Property, plant and equipment, net of government credits (32,894) (65,698) Proceeds on disposal of property, plant and equipment 97 15 Interest received 672 388 -------------------------------- Net cash flows used in investing activities (32,075) (41,933) -------------------------------- Financing activities Long-term debt repayments (3,083) (2,471) Finance lease payments (7,215) (6,142) Issuance of common shares, net of expenses 2,931 608 Interest paid (4,802) (5,411) -------------------------------- Net cash flows used in financing activities (12,169) (13,416) -------------------------------- Increase in cash and cash equivalents 47,623 7,129 Cash and cash equivalents - beginning of period 161,405 93,229 -------------------------------- Cash and cash equivalents - end of period 209,028 100,358 -------------------------------- -------------------------------- FOR FURTHER INFORMATION PLEASE CONTACT: John Burzynski Vice-President Corporate Development (416) 363-8653 www.osisko.comSylvie Prud'homme Director of Investor Relations (514) 735-7131 Toll Free: 1-888-674-7563 Source: Osisko Mining Corporation


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Source: Marketwire (Canada)