Bid made for Brett Resources

The junior mining company operating the Hammond Reef gold exploration just north of Atikokan received a takeover bid that could be worth up to $370 million.

Osisko Mining Corporation made the bid for Brett Resources’ outstanding shares on March 22 at a rate of $3.06 per share.

Brett Resources’ president and CEO Patrick Soares said Brett management and board of directors have endorsed the offer and believe it’s fair based on the fact Osisko can accelerate the Hammond Reef project.

"If more than 90 per cent or better of the shares are tendered to Osisko, then they will force the remaining shares to become Osisko shares and Brett will become a wholly-owned subsidiary of Osisko," Soares said. "The company will continue on as it has. It will just have a new owner."

None of the project’s current 70 employees should be affected, he added, noting most of Osisko’s personnel are busy with another project in Quebec.

And with $250 million in the bank, Osisko should be able to move the Hammond Reef project forward faster than Brett could, Soares said.

"They’ll hopefully get the permits moving faster and have this project in production by our set date of 2015," he said, adding that Osisko has a growth profile like no other junior company in Canada.

They’re not producing any ounces at the moment, but next year they’re projected to produce 400,000 ounces. The next year another 700,000 and by 2015, with the addition of Hammond Reef, more than 1 million ounces.

"So from zero to a million ounces in five years, I think that’s fairly unprecedented in Canada," Soares said.
If Hammond Reef does start producing gold by 2015, it could see up to 450 direct jobs and 1,600 spin-off jobs created, added Soares.

Director of the Aboriginal community affairs for Brett Resources and Atikokan town councillor Bud Dickson said the bid has been received well by the community.

"The first reaction by Mayor (Dennis) Brown was he was hoping the bidder wouldn’t sit on the project, which we were assured wouldn’t happen," he said. "Our First Nation partners are still digesting it but are very positive towards the bid."

Although the bid isn’t finalized yet, Dickson noted the Hammond Reef project and Atikokan have been brought to the world stage and it’s brought hope to a community that’s been depressed for a long time.

"People lost wages, benefits, severance; contractors didn’t get paid," he said. "As a councillor I can tell you we’re looking at it very closely and carefully with a lot of optimism but proceeding with caution. The future looks bright and good."