Executives

Sean Roosen – President and CEO

Andre Le Bel – VP, Legal

Analyst

Cosmos Chiu – CIBC

Dan Rollins – RBC Capital Markets

Anita Soni – Credit Suisse

Osisko Mining Corp. (OTCPK:OSKFF) Q4 2013 Earnings Conference Call February 19, 2014 10:00 AM ET

Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Osisko Mining Corporation 2013 Fourth Quarter Yearend Results Conference Call. At this time all participants are in a listen only mode. Following the presentation we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for questions. [Operator Instructions]. Joining us on today’s call are Sean Roosen, President and Chief Executive Officer of Osisko Mining Corporation; Bryan Coates, Chief Financial Officer; and Luc Lessard, Senior Vice President and Chief Operating Officer.

I’ll know turn the call over to Mr. Sean Roosen. Please go ahead, Mr. Roosen.

Sean Roosen – President and CEO

Thank you, operator. [indiscernible] at home. Thank you for joining us on the 2013 yearend call and Q4 reporting. We will be referring to a Power Point deck that is found on the front page of our website and before we get going I’d like to have Andre Le Bel our Vice President of Legal read you the forward looking statements.

Andre Le Bel – VP, Legal

Certainly. This presentation may include certain forward-looking statements. All statements other than statements of historical fact, included herein, including, without limitation, statements regarding future plans and objectives of Osisko Mining Corporation are forward-looking statements that involve various risks, assumptions, estimates and uncertainties. These statements reflect the current internal projections, expectations or beliefs of the Company and are based on information currently available to the Company. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. All of the forward looking statements contained in this presentation are qualified by these cautionary statements and the risk factors described above. Furthermore, all such statements are made of the date this presentation.

An investment in the Company is speculative due to the nature of the Company’s business. The ability of the Company to carry out its growth initiatives as described in this PowerPoint presentation is subject to risk factors which are described in more detail in the Company’s Annual Information Form filed with the Securities Commission or similar authorities in certain of the provinces of Canada. Investors should not place undue reliance on forward-looking statements as the plans, intentions or expectations upon which they are based might not occur. Investors and others who base themselves on the Company’s forward-looking statements should carefully consider such risk factors, as well as the uncertainties they represent and the risk they entail. The Company also cautions readers not to place undue reliance on these forward-looking statements. The forward-looking statements contained in this report are expressly qualified by this cautionary statement.

Sean Roosen – President and CEO

Thank you, André. I hope everybody has a copy of the PowerPoint in front of them. 2013 was really our completion year for Canadian Malartic and as we’ve gone through, just a bit of a reminder to everybody on Page 3; Canadian Malartic is the last big mine that was built on time budget and the sector produced for 16 years more. We’re really coming into our own at present. I just thought it would be good to start off by reviewing what’s been accomplished at Canadian Malartic. This project started in — it was fully financed in 2009 with a construction release. In August 2009 we achieved commercial production and April 2011 it has gone through nine steady quarters of ramp up and continued growth and really the last project to achieve this and we’ve also not been back to the markets for an equity financing since this project was fully financed once in 2009.

I’ve also put a couple of metrics on Page 3 regarding delays that have been incurred other projects. As you can see on these projects, Canadian Malartic and the management team there have done significantly better than most other execution teams with several of these projects been delayed by 2.5 to 4 years and having capital expenditure overruns of over 130% in some cases.

Onto Page 4, some financial highlights for 2013. Gold sales of 136,826 ounces for the fourth quarter of 2013 an average price of $1,275 in Q4 resulting in a total of 464,991 ounces sold for 2014. Average price was achieved at $1,388 of 2013, significantly lower than the average gold prices that we recorded in 2012. However we were able to maintain our margins at a significant rate due to cost reductions and increased throughput. Cash margin per ounce for Q4 was $596 and one of the lowest quarter gold pricings that we’ve had and $650 margin for all of 2013.

Revenue is at a CAD185.8 million in Q4 and CAD675 million for 2013. The earnings from the operations stand at CAD53.7 million in Q4 and CAD190 million for 2013 on a dollar per dollar basis and enterprise value. We will come back this later on significantly more than almost all the operations that are out there right now on an enterprise value basis and significantly more than Goldcorp who has launched an [indiscernible] on a dollar per dollar basis, more than 50%. Adjusted net earnings of CAD32.9 million for Q4, CAD116 million for all of 2013 with CAD180 million invested in mining assets and various projects developing on the Canadian Malartic site for 2013.

Capital expenditures for the year were reduced by total of CAD96 million from the original budget and cash resources now stand at CAD210 million, leaving us with the net debt position amiable to anyone in the marketplace of less than CAD120 million in enterprise value in excess of 3 million running — on enterprise value working at less than 3.2 net debt on the company.

Financial results on Page 5. The revenues again for the quarter were at CAD185 million for the quarter and year ended 2013 at CAD675 million. Earnings from mining operations stand at CAD190 million for the year. We did take a write-down for Hammond Reef. So we had a noncash write-down on that project, net earnings resulting in a loss for the year at CAD455 million. That write-down was taken in June 2013 on a loss per share of $1.04 for the year including that noncash write-down.

On Page 6 increase in cash flows as we came into the final ramp up of the year with cash flow from operating at CAD261.6 million for the year and from mine operations at CAD190 million for the year and CAD53 million in Q4. Delivering on the CapEx reduction program on Page 7, capital investments for the fourth quarter were at CAD20 million for the year excluding CAD5.1 million that was attributed to stripping on areas of the new IFRS rules and sustaining for capital Canadian Malartic at CAD7.4 million, topographic drilling and overburden removal of CAD5.2 million Canadian Malartic, expansion at CAD3.7 million. There was nothing spent at Hammond Reef. Upper Beaver was down to CAD0.5 million and exploration to CAD3.5 million, on [indiscernible] assets and subsequently on the Guerrero project in Mexico.

Pretty good accomplishment for the team. I’m very proud of what we were to do in terms of capital containment and commitment that we gave to you in April 2013. We stand at CAD123 million in real-time. The revised budget for the year at April was CAD237 million, down from CAD220 million at the beginning of the year. So again a big step forward in terms of capital in reduction for 2013.

Page 8. We’ve reviewed this in the past but I think it’s very important to review it, given the Company has been put in play through a hostile takeover. There is no stress on the balance sheet. Canadian Malartic Osisko is in extremely good financial health, partially due to the fact that the debt rescheduling was achieved this summer with our partners at Canada Pension Plan, Caisse de dépôt and Ressources Québec and also with that advancement we’ve also paid down some of the debt at Caterpillar Finance. We have FSTQ as well. Currently for 2014 the only real debt payment that we have in front of us on the amended debt is around CAD30 million which is very serviceable on the given strength of our cash flow. We have also achieved reduction in interest from 7.5% down to 6.87% on the CAD150 million component, leaving us in good shape.

On Page 9, cash component now sits at CAD210,500,000 with working capital of CAD132 million, debt at CAD317 million and total asset totaling CAD2.22 billion of shareholders’ equity standing at CAD1.731 billion. The net debt position now stands at $119 million I mentioned earlier which is representative of about 3.2% of full enterprise value, one of the lowest debt components in the business. Once again Osisko is on very good financial health and quite a sustainable business when we are talking one of the strongest cash flows in this space.

Page 10; reviewing the mining; total tons mined was 17 million tons, a little over 18 million tones that was milled, average grade at 0.92 for 2013 Q4. We saw the grade increasing as we get further access into the north pit wall of 1.04 grams, which is 10% more than what we have in the annual average for 2013.

Grade and recovery have been extremely stable as we monitor the supply. We now produce more than 1,060,000 ounces. The recovery is standing at 88.6 grams in Q4, or 88.6% and at 88.9 for the year. I’m very happy that we have been able to hold that recovery and we continue to enjoy those higher recovery levels as we continue onto 2014. Gold production in Q4 was at a record of about 137,000 ounces with 475,000 ounces recovered for the year.

Cash cost, again going all the right way, CAD713 and $679 for the fourth quarter and for those of you who saw the press release, we also had record cash cost of $613 in January when we achieved a new record for the month of over 50,000 ounces of productions in January, our lowest cash cost ever.

Production record, that we talked about here at Page 11, 50,000 again and mill throughput achieving 1.52 million tons. For the quarter average daily throughput of 49,000 tons a day as we worked on those upward ground pillars and we had higher grade subsequently as we work in those tougher areas and we do get a little bit of under grade when we are on the near surface pillars where we you have access to higher grade which provide the record production through the year for the session. And January we also maintained the higher recoveries at 88.6%.

Again on page 12, because of the key point of this project and probably the subject of why that has been covered by so many of our competitors, Canadian Malartic has really had one of the smoother ramp ups in the sector, going from 91,000 ounces in Q1 in 2012 to a steady growth towards where we are at the fourth quarter 137,300 ounces in the Q4 and setting the stage with the January numbers at 50,000 ounces in the coldest month of the year, in the coldest winters since 1984, really quite an achievement for our team. I think it goes to the depth of the team and the quality of the people involved that given the complexity of this project and its location near the town of Malartic, they’ve had an exceptional ramp up and they’ve achieved cost reductions at the same time, that we see on the right-hand side, where Q4 coming in at somewhere in CAD713 per ounce and $670 per ounce. And again January a record low cost of $613 per ounce.

On the milling side, the optimization program that we announced in second quarter has continued to deliver mill input even though we had to feed the course of ore from the near surface blast, ran at an average of 54,000 tons in Q4, which is a 14% increase over the 2012 numbers, and reduced cash cost significantly down to 14% since 2012 in the Canadian category and over 19% on a U.S. dollar basis on an average cash cost.

This ’14, again steady state being achieved at the mill. We ran it just to check under name plate for an operating day basis. In the fourth quarter it’s 54,000 for the day, again another achievement for our crew, given that we were running the course of ore for the near service platform [indiscernible] a north pit wall. As we get deeper into the pit, we expect to see the mill continue to accelerate as we get better fragmentation from the more mature ventures at the lower levels.

Page 15, we’ve seen a throughput for the quarter again. Fourth quarter we did have significant amount of weather but mostly we were affected by the blasting of the surface ground pillars which are quite complex in nature requiring a lot of fly rock suppression systems which can multiply the work factor by up to eight times. So we had to slightly reduce production from where we were in Q3 And in terms of total tons produced, but again most of it due to the working over and around the old mine workings where we have to execute things in a safe manner using a lot of remote controlled drills, shovels and very safety intense operations that need to be carried out when we are over those [indiscernible].

Page 16 is really sort of the most important slide that we’re going to review today; the improved access to high grade zones. On the upper image you can see the location of deposit and the darker the color the higher the grade. By using a 1 g/t cut-off, the red zones would have the high grade of about 1.8 g, 0.7 g cut-off zone would have a grade of about 1.5 g, and you can see in the lower image how the high grade component is trying to express itself in the pit floor as we continue to access that north pit wall where we see the bulk of the high grade pit and the Canadian Malartic component of the deposit.

So as we get more contribution we mine more from that north pit wall, we expect to see grade continue to go up. Also in terms of availability of the overall mining fleet and our ability to execute blasting, as we get deeper on that north pit wall, we start to get less downtime which we can see on Page 17. We ramped 16% downtime due to noise and weather. In 2013 that was a total of 4%. So that has to be gained as we get deeper and we have less constraints placed on the mining operations due to the proximity, the talent and the noise congestions which we must comply to. So this is an evolutionary event. As the pit develops, this mine just continues to get better and better. The strategically difficult work is behind us. All the old underground work that come to surface have been managed as the voids have now been backfilled and carry normal mining operations. This will also reduce our mining cost.

Page 18, again cost improvement on a per ton basis. As we see here in Q4, the mining cost was running around CAD9.66 which has some pressure on them from those shallow stopes that we had to deal with in those early benches and also we saw a reduction in milling cost back down to $9.38 as we went through this G&A is sitting at around CAD2.12 for an all in cost up about CAD21.16. So, that’s a big move forward in terms of the evolution of the pit and we expect to see those costs come back down as we get more to a regular mining from that north pit wall.

We also achieved some significant things in terms of optimization programs, in terms of how our blasts carried out the fragmentation that we’re getting which has resulted in lower mine wear and we’re also enjoying some lower grinding media costs and the cost per ton mined was down to $30.3 in Q4 but for the year end it was $2.72. Again that reflects the mining operations carried out around those old stopes.

Page 19, just a bit of an evolutionary as to how we have built a $3 billion company here. This company started really in 2003. We acquired the Canadian Malartic project in 2004, first drilled holes in March 2005. We completed the full on feasibility study in November of 2008, just in time for the financial crisis. We completed the construction and financing of that project between 2009 and 2011, having raised $1.50 billion between equity and debt in 2009. Lastly commercial production achieved in 2011 and then on to the commissioning basically of eight quarters of commissioning to get us to where we are today, one of the best performing gold mines in the world, with cash cost in the first quartile and set for continued production north of where we are in the 475,000 ounces that we achieved in 2013.

Put this into context on Page 20, we’ve provided you with a scattergram here that shows where Canadian Malartic compares to the assets of the senior mining companies in the space. Canadian Malartic is significantly in the world class category. Cash costs are at the low 6.13 in January. With significant amount of reserves, this makes Canadian Malartic the much coveted asset that has been demonstrated to be by Goldcorp.

In terms of where this fits, this is significantly better than most of the mines that are in the other asset bases out there and would be top five asset among many asset base in the world. And certainly in Goldcorp’s case would rank us probably their top asset, ready to be successful on a comparative basis.

On Page 21, bit of a conclusion in terms of where we are. I wanted to back to how Osisko’s stacks up against the current bidder from Goldcorp. We offer a significantly better value return to shareholders and this is all about value at the end of the day. We have 50% more reserves on a per dollar invested basis, 44% more production on a per dollar invested basis and 81% better cash flow on a per dollar invested basis. These are significant metrics I think that everybody needs to pay attention to.

This is another valued asset that’s just coming into its own and I think that having these metrics and understanding them give shareholders the opportunity to reflect on the value, the gap that is on the table here, the bid that has been provided by Goldcorp. If we look at the peer group around us, which is increased an average of 33% since the hostile [ph] day it was launched, the Goldcorp bid offers little to no premium at this point in time on arguably one of the best single asset companies in the space, if not the best.

So I think the shareholders need to reflect on what they own now before they make any decisions and we would encourage you not to sell your new shares as these low, low prices. Canadian Malartic management team has created a significant amount of value for investors in a very short time compared to our friends at Goldcorp. We’ve delivered significantly better returns on a five year basis and I think that if you let Canadian Malartic continue to produce, you will enjoy a significant amount of cash flow, which will be returned to investors.

The investment proposal that we put in front of you today can be backed up on any metric, and if this asset was to go to Goldcorp, it would be dilutive to you because they’ve said it would be accretive on all measures to them. So that can only mean it’s dilutive with shareholders.

In terms of where we are from a risk profile, it’s been said that it’s better to have multi-asset base. We think that being on grid power in Quebec with a well hailed, well trained and well settled workforce, the risk is significantly lower than some of the other jurisdictions that we as shareholders would have to expose ourselves to if we accepted the Goldcorp bid. We don’t have to go to Argentina, we don’t have to deal with Guatemala and we don’t have to deal with the Dominican Republic or any of the other jurisdictions that have become somewhat unstable and somewhat exotic. We’re in Quebec with a brand new mine law, the future is clear, the runway is clear. This is a long life asset with lots of upside to come. A significant amount of exploration upside remains on the project and as well up in the company. We also have the Kirkland Lake assets which are starting to mature in terms of what we see there, significant exposure two Tim Hortons away from the existing operations and we also have a fine mine building team, the last group that’s actually been able to build a large mine and bring it in on time and on budget to carry out any further growth in the company.

In terms of exploration excellence, Bob and his team has delivered significant amount of discovery and were the forward thinkers on bulk tonnage exploration in the Archean rocks in Quebec and Ontario and we’ve had about an eight year head start on everybody else to do that work. We encourage all shareholders to think about future value that can be delivered from both the mine building team and the world class exploration team has got us to where we are today.

So on that note I think we’ll head towards the Q&A. Before we get into the Q&A, I would like to go over in terms of how we would plan to provide guidance and reserve updates at this time. There is a significantly complex legal situation on the go as people are aware regarding the confidentiality agreement dispute that has gone to court here in Quebec and based on our guidance from legal counsel, when and if becomes time, we’ll advice you as to when we plan to publish reserve updates and guidance on production and mine plant.

Now at this point in time we are involved at a competitive and tense legal contest that must play out. We can tell you as have seen in the resource model that Canadian market as a deposit is significantly stronger than most with more than 75% of the ounces contained in the high grade component of the deposit, making it far less susceptible and sensitive to gold prices that many other deposits that you will review. In terms of the context, we would also refer you back to the last reserve statement of February 19, 2013. At the end of that reserve statement there is a sensitivity chart to gold price which is the most recent information that’s public about the reserve and resource status at Canadian Malartic.

Again jus to remind you that in terms of a dollar to dollar investment 50% more reserves per dollar invested, 44% more production per dollar invested and 81% higher cash flows per dollar basis invested in Osisko. On that note we’ll open it up for the Q&A.

Question-And-Answer Session

Operator

Thank you. [Operator Instructions]. Our first question is from the line of Cosmos Chiu from CIBC. Please go ahead sir.

Cosmos Chiu – CIBC

I got a few questions here. Maybe first off Sean, we saw Q4 grades and also Q1. Sorry January 2014 grades were actually pretty good 1.04 and 1.16. How sustainable is that grade? Judging from Slide 16, which you’ve kind of put out, it looks pretty sustainable but I just an overall sense.

Sean Roosen – President and CEO

We already discussed in the evolution of the project, the access to higher grade component and the north pit wall is the key to sustain that grade. We made excellent progress in both Q3 and Q4 in terms of exposing that and as you can see the footprint of the higher grade component is significantly more exposed on the pit, but previously and as we continue to mine based around that North pit wall in the center — what we call the central, we will have more ability to control grade as the walls. So this ability to control grade is enhanced each and every day as we progress deeper on the north wall.

Cosmos Chiu – CIBC

For sure. And then in terms of throughput Sean, in January 2014 on a calendar day basis, the throughput was above 50,000 tons per day. I don’t know how much you can tell us but in the past you’ve guided to — maybe even on a calendar day basis it could get up to 52,000, 53,000 tons per day. Is that — are you still working towards that target?

Sean Roosen – President and CEO

Certainly. That’s quite sustainable and doable when we’re in the lower benches. When we’re mining from the near surface material we get a coarser of blast fraction [ph] and especially around the around the old stopes. We did have significant amount of contribution from those ground pillars which we don’t get nearly as fragmentation. So that does slowdown throughput of that mill. However we do enjoy higher grade when we have those ground pillar contributions. So it’s an evolutionary event that we will be getting better price traction as we get down in those lower benches and that will increase throughput.

In January we also had one of our ball mills that had a bearing alignment issue that we were running with one ball mill for six days in the month of January when we achieved this. So now we’re back-up, we’re running all three ball mills and the mill is running at 92% availability as we speak today.

Cosmos Chiu – CIBC

Yes, great. And on slide 16 you also kind of showed South Barnett. Maybe can you first off remind us what’s the current timeline or the last disclosed timeline on South Barnett in terms of development?

Sean Roosen – President and CEO

Sure. The program that we’ve talked to you about is underway. We’re in the process now. The final location of the deviation, it’s actually been grade two on a technical level now. It has to go through the [indiscernible] process. We hope to have that wrapped up in 2014 or in 2015 and in construction of the relocation of that as we get forward out at the end of this year or early in the 2015 and have some contribution in excess from the southern portion of the Barnett in the interim while we’re doing that. So I’ve given you guidance before that 2017 is when we saw it coming into the mine plan. However if we are able to get that to happen sooner, we most assuredly well. So that’s where we are right now.

Cosmos Chiu – CIBC

Okay. And then maybe one last question. Given all the different write-downs and impairments that we’ve seen in the industry, have you done the impairment and write-down test on the Queenston assets?

Sean Roosen – President and CEO

Yes, at this point in time, I mean if you go back to the Queenston asset, the PA [ph] study was done at $1,200 our goal and an after-tax IRR of 28% and no impairment required. It’s very robust project and continuing the strength with further drilling. So we don’t see any impairment test that we are concerned with at this time.

Operator

Our next question is from the line of Dan Rollins from RBC Capital Markets. Please go ahead.

Dan Rollins – RBC Capital Markets

Yes. Thanks and congrats on generating free cash flow in weak gold price environment in Q4. Sean, I’ve just got a couple of questions. One is just with respect to — just to clarify on Cosmos’s comment, with the throughput, is it still the target to get to 55,000 tons on a calendar day basis or an operating day basis?

Sean Roosen – President and CEO

Dollar day base is optimal.

Dan Rollins – RBC Capital Markets

Perfect. And then just with respect to the milling costs, obviously you’ve benefited from higher throughput over the last two quarters of the year but the milling cost have started to sort of creep up. They were around 875 level in the first half but closer to that 930 level in the second half. When do you anticipate to be able to get back to that 875 level or lower, and if so, when would you expect to sort of hit that steady state level?

Sean Roosen – President and CEO

It really depends on what we’re putting in the mill Dan. Of course our fraction — more work being done by the crushers and the grinding circuit. As we get better fragmentation from lower benches it will come back down. So right now we’re probably feeding about 20% of our mill fee, the 25% of the north pit wall in around those workings but as we’re down three or four batches we expect that to back off. So as we head into the summer and we get one more fragmentation advance as we get to the lower benches we should see that cost coming down in linear relationship to how much fragmentations is advancing.

Dan Rollins – RBC Capital Markets

Okay. And we should see these customers sort of curve with respect to your mining cost as well as you finish those big blasts?

Sean Roosen – President and CEO

That’s correct, yes. I think you already have seen those big blasts up there when we do the ground pillar blast, we have to put down about four to six feet of tailings. Then we have to drill through blasts with casings on remote controlled drills which we’re the only guys in the world I believe that have remote controlled drills to do this and then we have to put down two layers of blasting match and over top of that we put down a geotextile, half that we blast and then we have to reverse the procedure and we also have to carry out back filling operations once we have the open stope. So that’s a significant amount of work to do that, that a last surface pillar was blasted in November. So we’ve stopped those activities as we move forward and we have reduced by supply rock suppression system requirement as we continue on down which will reduce our mining costs.

Dan Rollins – RBC Capital Markets

Okay, great. And I understand you have number of rigs turning right now on your properties. When might be we be able to get an expiration update acknowledging that there is a legal case ongoing?

Sean Roosen – President and CEO

As we involved into this Dan, as you’ve highlighted, there is a significant legal issue the question here. In terms of the exploration driller program, we will continue to be give you updates on that in the normal course, as results become available.

Operator

Our next question is from the line of Kerry Smith with Haywood Securities. Please go ahead.

Kerry Smith – Haywood Securities

Sean what is the board’s philosophy on a dividend.

Sean Roosen – President and CEO

They’re good. The strategy of the Company, as you know in April we came out of 2013, we revised our strategy and we reduced our capital commitments. Given the gold price and the way that the shareholder concern was about capital commitment, we reduced our capital commitment by a plus $90 million in 2013 as it was a set stage to a significant dividend policy to come out in 2014. We’ve almost achieved net debt zero in the company with only a $190 million on that debt which has put us in a position to look at very robust dividend policies and then also we achieved in the summer — as you know we negotiated with CPC because they scheduled the debt program which also enhanced our ability to approach the dividend policy. So we are dedicated to returning cash to shareholders and as I said to you Kerry, my theme for 2014 until I was rudely interrupted with the pursuit of boredom [ph] and the payback of shareholders, which we would like to get back to by declaring large dividends and then mining Canadian Malartic and returning cash to our shareholders.

Kerry Smith – Haywood Securities

Okay, so do you think, let’s say you wouldn’t have had the bid from Goldcorp, would you have been in a position to pay a dividend in 2014, [indiscernible] intention.

Sean Roosen – President and CEO

We would have been able pay a very good dividend. Of course, now a chunk of that is being expended on lawyers and bankers of course.

Operator

[Operator Instructions] And our next question from the line of Anita Soni with Credit Suisse. You may go ahead.

Anita Soni – Credit Suisse

Just following up on Kerry’s question, so I should be upping my G&A for next quarter as a result of lawyers and bankers?

Sean Roosen – President and CEO

They have — they do see the biller often [ph] Anita.

Anita Soni – Credit Suisse

Okay, just in terms of throughput, I mean the downtime now you’ve reached sort of four or five quarters where you see sort of five, six days of scheduled maintenance. That seems to be what’s recorded in the disclosure in the presentation. Is that you know — what gets you over the hump where you can get that scheduled maintenance down or where you can increase that throughput, up more towards that 55 ton per day on the calendar day basis.

Sean Roosen – President and CEO

Well, as you saw last year we reduced our downtime significantly. We had four scheduled major maintenance shutdowns. So we went to three. So we did reduce the total number of down days in 2013 and we went from feasibility study of 92% availability, we achieved 93% availability in the middle. The real driver on the throughput is again the kind of feed that’s coming from the debt and as we get more stable blasting operations in the north pit wall, that will set the stage, that is the main contributor. Also in terms of the optimization where steel and the rest of it, we’ve kind of achieved most of the optimizations now. We don’t have a lot of test worth left on minor a configuration, other estimate. So now it’s just a — it’s really the final optimization and again really driven by the fragmentation that we get from the bid.

Anita Soni – Credit Suisse

Right. And when I was onsite last, I think you guys were talking about sort of sub 250 per ounce on the material that doesn’t really need that blast control, blast fragmentation controls. That’s still valid?

Sean Roosen – President and CEO

For sure. We achieved 272 overall for the year, [indiscernible] little bit higher in that fourth quarter as we handled those peer service blast but. We’re on a marginalized basis for the year 272 including a significant amount of high cost fly rock suppression system managed plots in the north pit wall. So now that we’re evolving out of that we expect to see it fall down below that 250 target.

Anita Soni – Credit Suisse

And just if I may, what does it take? I know you were on an interview on TV. What does it take to get you to the table to have a discussion with Goldcorp, on what price?

Sean Roosen – President and CEO

I think we’ve been fairly clear. If somebody wants to give us the same metrics that we see on Goldcorp for Canadian Malartic, then the shareholders would have to make a decision, I think where we are Anita, it’s pretty clear that there is no real premium on the table here. So it’s our job with the board of directors and the management team to make sure that value gap is closed and we’re significantly away from that fair value now. However we do have a court case that’s in front of the judge from our 3rd till 5th. So in terms of forward looking statements on that issue and what it takes to carry forward, I’m going to restrain from comment right now. We’ll let the proceedings speak for themselves.

Anita Soni – Credit Suisse

All right, so back to evaluating on a standalone basis can you give us any indications what the strip ratio would look like and what grade would look like for next year?

Sean Roosen – President and CEO

We haven’t published that right now Anita. As I said at the beginning of the Q&A, unfortunately due to the legal proceedings under way we can’t give you the full guidance or a reserve update until few issues are cleared up. So I won’t be able to comment on that for now. But you’ve seen the deposit perform at over 1 million ounces produced and covered and sold and the ore resource model from 2013 model not much has changed in the deposit. So I think that this is pretty steady straightforward operation relative to the sensitivity on our 2013 reserve statement and I think you can yourself pretty close to where we are.

On a reconciliation basis, I can give you some numbers. On a total contained ounces, we’re at 101.7% since the very beginning of the mine on the resource and we’re at 106% in terms of average grade achieved based since the beginning of the project. So we will be coming forward at the appropriate time with the guidance but unfortunately proceedings are underway of our normal course of business from there.

Anita Soni – Credit Suisse

Okay and then one last question — just that I’ve been asking all the companies on philosophical basis on how you estimate your reserves. What’s included in your reserve estimates? Are you including all your OpEx, any sustaining capital any corporate overhead at this stage?

Sean Roosen – President and CEO

We do pretty much a fully loaded number behind the fence. We’ve based it on the mine site as you know. We don’t have a lot of other mines on the gold. So our reserves — we will be looking at a similar price to the market competition that’s out there, nothing aggressive and we’ve always had a pretty conservative policy on lower cutoffs, even when the economic models have pushed them down, we’ve stopped them at 0.36 and 0.32. So we haven’t really had that balancing effect on changes of reserves.

And I’ve said before, we’ve viewed this in the past, more than 75% of the ounces are in high grade components and the sensitivity is little more here. On lower cutoff, it doesn’t have the same effect as it does in some other cases. So I am not particularly concerned about the changes in our reserve statement with the fully loaded cost structure that we’ve always reported.

Operator

Mr. Wilson I’ll be turning the conference back to you sir. You may continue with your presentation or closing remarks.

Sean Roosen – President and CEO

All right. Thanks everybody for interest and support. Do not turn in your stock. There is more to come and we will work hard with our management team and our Board of Directors to close the value gap that we have in the marketplace today. And good luck with the rest of the reporting session and we’ll see you all mostly in Florida at the BMO conference this weekend. Thanks everybody.

Operator

Ladies and gentleman, this does conclude the conference call for today. We thank you all for your participation. Have a great day everyone.

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