Osisko Mining nears completion on Canada’s largest gold mine (OSK)

Osisko Mining Corp. (TSE:OSK) is preparing to bring Canada’s largest gold mine, the Malartic gold deposit, into production in Q2 2011.

Changes are afoot at Osisko Mining Corp. (TSE:OSK) as the company prepares to bring Canada’s largest gold mine, the Malartic gold deposit, into production in Q2 2011. Earlier this week, Goldcorp Inc. (Public, NYSE:GG) sold its 10.1 percent stake in Osisko for $530 million.

The move alleviates speculation that Goldcorp intended to acquire Osisko, and TD Newcrest analyst Daniel Earle sees that as a bullish sign. “Over the long term, we expect Osisko shares could benefit from the elimination of the perceived overhang created by Goldcorp’s sizable stake in the company,” he wrote in a note to clients.

Earle also believes Osisko’s well-positioned to meet its goal of bringing the Malartic deposit online next quarter despite some “execution risk.” The mine is expected to produce more than 600,000 ounces of gold a year over a 12.2-year mine life with operating costs of just $319 per ounce.

In other news, Osisko announced yesterday that six of its exploration properties are set to be acquired by Colorado Resources Ltd. (CVE:CXO) pending approval by Kinross Gold Corporation (NYSE:KGC). Osisko will also contribute $500,000 in an equity financing to help fund exploration of the properties in exchange for 200,000 shares in Colorado.

“This transaction between Colorado, Osisko and Kinross allows Colorado to continue the great work started by Brett and Kinross,” Colorado Resources’ President Adam Travis said. “We welcome Osisko as a shareholder in Colorado and look forward to advancing the British Columbia projects with Kinross and strengthening our partnership with them.”

Shares in Colorado Resources have risen 78 percent since they started trading on Nov. 5, 2010. Shares in Osisko have see-sawed in recent months, with shares up 1 percent over the past six months. Expect a pop if and when the Malartic deposit goes into production.

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Tocqueville Gold Fund (TGLDX) moves higher on Morningstar’s list of top-performing mutual funds

The Tocqueville Gold Fund has edged out the PIMCO Real Estate Real Return Strategy A (PETAX) mutual fund for the No. 2 spot on Morningstar’s top mutual fund performers YTD. That puts it behind only the Dynamic Gold and Precious Metals I (DWGOX) mutual fund, another gold-focused fund that’s returned some 50 percent YTD.

The Tocqueville Gold Fund has edged out the PIMCO Real Estate Real Return Strategy A (PETAX) mutual fund for the No. 2 spot on Morningstar’s top mutual fund performers YTD. That puts it behind only the Dynamic Gold and Precious Metals I (DWGOX) mutual fund – another gold-focused fund that’s returned some 50 percent YTD. The Tocqueville Gold Fund has returned just shy of 36 percent YTD, and here’s a look at its Top 10 biggest holdings as of Aug. 31, 2010:

Holding % of Total Assets Ticker
Physical Gold 7.2% n/a
Osisko Mining Corporation 6.2% TSE:OSK
Randgold Resources Limited – ADR. 4.5% NASDAQ:GOLD
Ivanhoe Mines Ltd. 4.4% NYSE:IVN
Eldorado Gold Corp (pvt) 4.1% NYSE:EGO
Andean Resources 4.0% TSE:AND
IAMGOLD Corporation 3.8% NYSE:IAG
Silver Wheaton Corp (pvt) 3.6% NYSE:SLW
Newmont Mining Corporation 3.5% NYSE:NEM
Goldcorp, Inc. 2.9% NYSE:GG

Compare their holdings with Dynamic Gold and Precious Metals I (DWGOX) mutual fund, and you’ll see Tocqueville Gold Fund’s more conservative – although there are quite a few overlaps. Namely, both funds count the following stocks in their Top 10 holdings:

  • Osisko Mining Corporation (TSE:OSK)
  • Eldorado Gold Corp (NYSE:EGO)
  • Andean Resources (TSE:AND)

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