Osisko Gold navigates shifting regulatory regime during COVID-19 clampdown
Gold miners are favored by lower costs and higher metal prices, said Sean Roosen, chair and CEO of Osisko Gold Royalties, who spoke with Kitco via video conference today.
Oil prices, a major input cost for miners, are hitting multi-year lows.
"A significant component of fuel costs comes from both your explosives and your haul trucks, so it definitely helps the numbers,” Roosen said. Roosen also noted that Canadian and Australian miners are being helped by soft currencies. He notes that the gold price has been hitting significant highs in many currencies. "So these are good times for jurisdictions that have softer currencies. Your margins are being protected even though the gold price has been pretty darn good in U.S. dollars as well."
Some of Osisko's projects are operating while others are closed.Last week Quebec stopped mining in the province to prevent the spread of COVID-19>, and the Malartic Mine, Canada's largest gold mine and Osisko's cornerstone asset, ceased operations. However, mines in other regions of Canada are still producing, but under strict health guidelines. Roosen said Osisko is calibrating to each regions requirements.
"I think as time evolves over the next week or two, we probably get a little more consistency across the different jurisdictions," said Roosen.
Roosen noted that some mines within their portfolio are still producing, such as Victoria Gold in the Yukon. "This will be their first full season. They're running full blast," said Roosen.