TGR: You continue to hold a fairly large position in Osisko Mining Corp. (OSK:TSX). Now you have a position in Detour Gold, a similar story in the same part of the world. What can you tell us about Detour Gold?

DG: It is very similar to Osisko, in that as both companies build and derisk their projects, their market valuations should rise as the market appreciates their efforts. Both are meeting their goals and realizing success.

TGR: Osisko has been in production a little less than a year. Are you satisfied with its results?

DG: Basically, yes. We understand the design and engineering challenges a company can run into when it starts up a mine. Our understanding is that the deposit is performing better than perhaps was expected. The grades and recoveries are good. Osisko is producing gold, perhaps not quite at the level originally expected, but we can work with that. In the end, we think Osisko will have a very successful operation. Given the gold price and its production costs, the company should have this mine paid off relatively quickly.

We might be a little disappointed that the market is not giving Osisko the valuation we feel it deserves. I am not sure why. It is in a favorable jurisdiction. Its costs are not out of line. It is slowly meeting its targets. Maybe what concerns investors is that the ramp-up is not happening soon enough. But in time, Osisko should deliver the project as it intended.

http://www.theaureport.com/pub/na/13058