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MONTREAL - Osisko Mining Corp. (TSX:OSK) plans to acquire Hammond Reef gold project in Ontario through the friendly takeover of Brett Resources Inc. of Vancouver (TSXV:BBR) in an all-stock deal valued at $372 million.
Brett's shareholders would own about 11 per cent of Osisko if they accept the friendly offer, announced Monday.
Osisko is offering 0.34 of one of its common shares for each share of Brett. Based on Friday's closing stock prices, Osisko's offer is worth $2.92 per share - a premium to Brett's market price of $2.09 on the TSX Venture Exchange.
Osisko's primary property is the Canadian Malartic gold project in Quebec, which is scheduled for start-up in the second quarter of 2011 with production of 688,000 ounces of gold in 2012.
Brett's Hammond Reef gold project near Thunder Bay, Ont., has the potential to add 463,000 ounces of gold production per year, initially.
"Osisko is very pleased to make this offer to the shareholders of Brett to join us in our quest towards creating Canada's newest premier mid-tier gold producer," Osisko chief executive Sean Roosen said in a statement.
"The addition of potential future production from the Hammond Reef project to Canadian Malartic could well see us become a million ounce per year producer within five years."
Ron Netolitzky, chairman of Brett, said the company's board and management is in full and unanimous support of the offer from Osisko, which is conditional on at least two-thirds of Brett's shares being tendered.
"Hammond Reef has been a company changing asset for Brett, and our team has progressed the property through the value creation chain to the point where it has garnered what we feel is the necessary attention of a serious partner to help us take it forward to potential development," Netolitzky said.
"By combining forces with the industry leading team from Osisko, we feel that we are offering the shareholders of Brett the opportunity to maximize value through our combined efforts."
Brett's board has agreed to pay Osisko a $17.5-million termination fee if the transaction isn't completed in certain circumstances. The equivalent of 19.6 per cent of Brett's shares have been tendered so far.
