(Montreal, November 8, 2013) Osisko Mining Corporation (the “Company” or “Osisko”) (OSK: TSX, EWX: Deutsche Boerse) today reported net earnings of $9.8 million ($0.02 per share) for the third quarter of 2013 compared to $28.3 million ($0.07 per share) for the corresponding period of 2012. The Company generated cash flows from operating activities of $70.7 million during the third quarter of 2013 compared to $55.8 million in the third quarter of 2012.

Q3 Highlights

• Record gold production of 120,208 ounces at operating cash costs of $754 per ounce;
• Earnings from Canadian Malartic of $39.0 million;
• Operating cash flows of $70.7 million;
• Free cash flows¹ of $32.4 million;
• Net earnings of $9.8 million or $0.02 per share;
• Investment of $38.3 million in mining assets and projects;
• Record tonnage processed at 4.7 million tonnes (average of 54,133 tonnes per operating day);
• Final deposit of $11.6 million to cover the future rehabilitation costs of the Canadian Malartic mine, for a total deposit to date of $46.4 million, representing 100% of the required guarantee;
• 2013 gold production estimated at 485,000 ounces;
• On track to deliver over $80.0 million capital expenditure reduction program;
• Agreement to reschedule payments of $225.0 million in long-term debt;
• Cash resources now stand at $171.6² million.

Sean Roosen, President and Chief Executive Officer commenting on the third quarter results: “Canadian Malartic operations continue to evolve in accordance with our plan. We continue to improve in all facets of the operations: safety performance, community relations, mill availability and throughput. We achieved record gold output during the period. Despite softness in the gold markets, we delivered strong cash flow from operations of $70.7 million. We will continue our efforts to optimize operations and costs to ensure that Canadian Malartic delivers strong sustained cash flows for our shareholders.”

The mine operating statement for the production period is as follows:

Key operating results

(in thousands of Canadian dollars, unless otherwise noted)

The mill operating team continues to work at improving the mill throughput and availability. September was a very strong month with the average throughput rate exceeding the 55,000 tonnes per day name plate capacity by 5.3%. The mine generated earnings of $39.0 million during the quarter (YTD: $136.6 million), compared to $63.5 million in the corresponding period in 2012 (YTD 2012: $185.9 million). The decrease in profitability is due to a 20.4% (YTD: 13.2%) decline in the US$ price realized on the sale of gold and higher depreciation charges due to increased gold output.

During the quarter, approximately 5,180 equipment hours (6.8% of available hours) were lost due to noise and weather constraints, compared to 4,470 equipment hours (5.9% of available hours) in the second quarter of 2013 and 5,830 (6.0% of available hours) equipment hours in the third quarter of 2012.

The production statistics are as follows:

The third quarter tonnes mined constitute a record for the mine. However, mining activities continue to be affected by challenging conditions due to operating close to an urban area and working over old underground stopes.

Production in the third quarter of 2013 improved to an average 54,133 tonnes per operating day compared to 52,592 tonnes per operating day in the previous quarter and 43,181 tonnes per operating day in the third quarter of 2012. Continued optimization of operations at the mill, the two cone crushers and the additional pebble crusher installed in 2012 allowed the mill to reach new records in the third quarter. In coordination with the technical advisors, the Canadian Malartic team continues to work on improving the mill throughput and enhancing operating efficiencies.

Mill operating statistics continue to show progress in all categories.

Operating Costs

Cash costs per ounce⁷ for the third quarter and the first nine months of 2013 stood at $754 and $779 respectively, compared to $851⁸ and $855⁸ in the corresponding periods of 2012. The improvement over the comparative periods in 2012 is mainly the result of increased throughput and gold production, improved efficiencies and reduction in contractors’ costs.

The Company continues to pursue operating efficiencies, and has intensified its cost optimization program as the operations are now at near name plate capacity. Management expects that operating costs will continue to decline over the next year as it reaps the benefits of its optimization and cost reduction efforts.

Adjusted Net Earnings⁹

Excluding specific non-cash items, adjusted net earnings⁹ amounted to $21.9 million ($0.05 per share) during the third quarter of 2013 compared to $50.4 million ($0.13 per share) in the third quarter of 2012.

(In thousands of dollars, except for amounts per share)

The decrease in adjusted net earnings⁹ is mainly the result of lower average selling prices of gold during the third quarter of 2013 and higher depreciation charges.

Investments

The Company invested $38.3 million in property, plant and equipment during the third quarter. These investments were mainly focused on the Canadian Malartic mine (stripping costs, sustaining capital and expansion) and the Kirkland Lake and Upper Beaver exploration projects.

Volatility in the gold price and financial markets earlier this year has led Osisko to review in April its rate of discretionary spending in exploration and advancing new projects.  As previously announced, the Company is decreasing discretionary spending for 2013 by over $80 million.

Upper Beaver Project and Kirkland Lake – Larder Camp

On December 28, 2012, Osisko completed the acquisition of Queenston Mining Inc. As part of the transaction, the Company acquired the Upper Beaver Project and a package of lands covering 230 km² in the rich Kirkland Lake Gold Camp, which has produced in the past over 40 million ounces. Queenston had consolidated the land package over the past 20 years. To date, there have been several satellite deposits identified that could feed a regional mill.   Queenston Mining Inc. changed its name to Osisko Mining Ltd. on January 16, 2013.

The work at Upper Beaver is focused on drilling deep holes to test extensions of known zones.  The Company has completed approximately 34,795 meters of drilling since January 1, 2013. Work is currently limited to compiling information generated during the 2013 drilling phase, and to review the geological data for the entire camp.

Construction of the head frame and surface facilities has been delayed. The shaft sinking has also been delayed following the completion of the shaft collar. The pause in the project execution plan allows for the review of the construction and development approach with the aim of reducing the capital outlays.  This reassessment period will result in a deferral of approximately $50 million of the planned Upper Beaver outlays of $70 million for 2013.

The Company has completed 70,506 meters on various regional targets in the Kirkland Lake – Larder camp, including 2,430 meters in the third quarter of 2013.  Drilling activities have been reduced to focus on compilation and assessment of the results. The exploration expenditures at Kirkland Lake for 2013 are estimated at the original budget of $20 million.

Hammond Reef Gold Project

Osisko acquired the Hammond Reef gold project located near Atikokan in Northwestern Ontario, through the acquisition of publicly traded Brett Resources Inc. in mid 2010 for $375.0 million. Hammond Reef is a large development project with potential to become a substantial open-pit mine. In the third quarter of 2013, efforts were focused on the preparation of the feasibility study and the publication of the environmental assessment report.

A new resource estimate for Hammond Reef was released on January 28, 2013. As per the estimate, global measured and indicated resources currently stand at 5.43 million ounces gold at an average grade of 0.86 g/t Au and the global inferred resource stands at 1.75 million ounces gold at an average grade of 0.72 g/t (based on 0.50 g/t Au lower cut-off).

Hammond Reef Global Resource Estimates

Further, a whittle pit optimized undiluted resource was calculated (US$1,400 whittle pit shell), totaling 5.31 million ounces of gold at an average grade of 0.72 g/t in the measured and indicated category, and 0.28 million ounces of gold at an average grade of 0.65 g/t in the remaining inferred category.

Hammond Reef Undiluted Resource Estimates within US$1,400 Whittle pit shell

Osisko’s technical team is progressing on the feasibility study for the project. Due to significant inflation in the mineral industry over the past few years, the preliminary estimate of capital cost for a 60,000 tonnes per day operation ranges between $1.5 and $1.8 billion. Gold output is estimated to average 400,000 ounces per annum at a production cost of $800 to $850 per ounce. The group is continuing to review alternatives to optimize capital costs and improve the returns. Under the current scenario, the Hammond Reef gold project requires higher gold prices to justify the investment.

Based on preliminary feasibility results and current market conditions in the gold sector, the Company undertook a review of the project during the second quarter. The Company conducted impairment testing of Hammond Reef in conformity with IFRS practices and determined that an impairment charge of $487.8 million, net of a deferred tax recovery of $43.1 million, was necessary. Accordingly, the project value recorded on the Company’s books was reduced to nil.

The Company will continue to pursue low-cost permitting activities in the near-term and will continue to monitor market conditions.

Exploration

Prior to mid 2009, the Company’s efforts were focused solely on the development of its flagship asset, the Canadian Malartic mine. Following the securing of the financing, the necessary authorizations and the construction release, the Company began to seek other opportunities to complement the Canadian Malartic mine. The overall objective is for Osisko to achieve the status of a leading intermediate gold producer with annual production of 1 million ounces. The principle strategy is to create value through the identification and development of gold reserves and resources.

To build on its gold mining asset base, the Company has acquired advanced exploration projects, has entered into exploration agreements, staked ground, and invested in various public and private exploration companies with promising gold projects. Osisko continues to focus its efforts on its new Kirkland Lake area properties and its Guerrero Gold Belt properties in Mexico.

In Guerrero, Osisko continues to pursue initial grassroot activities including trenching and sampling, studying geochemistry and geophysical data, identifying drill targets and conducting initial drilling. Efforts were hampered by adverse weather conditions, which severely impacted local infrastructures. Osisko is working with various communities to repair these infrastructures, meanwhile the exploration program has resumed in October.

Osisko enjoys flexibility on its major projects, a benefit of being the sole owner, and thus can select the rate of execution of its investment programs without concern for compromising ownership rights.

Liquidity and Capital Resources

As at September 30, 2013, the Company’s cash and cash equivalents, short-term investments and restricted cash amounted to $171.6 million compared to $155.5 million as at December 31, 2012, as summarized below:

Short-term investments were acquired as part of the acquisition of Queenston as at December 28, 2012 and were converted into cash and cash equivalents during the first quarter of 2013 to increase the flexibility of available liquidities. In June the Company also collected the $30.0 million note receivable from Kirkland Lake Gold Inc. related to the sale of properties by Queenston prior to its acquisition by Osisko.

On July 5, 2013, Osisko deposited $11.6 million with the Government of Québec, representing the balance of the total guarantee required to cover the entire future costs of rehabilitating the Canadian Malartic mine site. The aggregate deposits with the Government of Québec amount to $46.4 million. Osisko is the first mining company in Quebec to deposit its full financial guarantee at commencement of operations, exceeding the legislation currently in force in Québec.

Modifications to long-term debt terms

In July 2013, the Company entered into agreements with CPPIB Credit Investments Inc. (“CPPIB”), the Caisse de dépôt et placement du Québec (“CDPQ”) and Ressources Québec (“RQ”) to modify certain terms of its long-term debt facilities. These modifications have not been reflected in the financial statements yet and the Company will assess the financial impact of the amendments on its consolidated financial statements on the closing date of the agreements.

• CPPIB loan ($150.0 million)

•  The loan repayments that were previously based on cash flow availability will now be based on pre-determined fixed amounts. The first repayment will be postponed to 2014.
• The fixed interest rate will be revised to 6.875% (from 7.5% previously).
• The maturity date of the 12.5 million warrants held by CPPIB will be extended to September 30, 2017 and the exercise price will be modified to $6.25 per warrant.  The exercise of the warrants may be accelerated at the Company’s option if the Osisko shares trade at a price above $8.15 for 20 consecutive days.
• The delayed drawdown facility ($100.0 million) established in May 2012 will be cancelled;
• The maturity date of the loan will be postponed to June 30, 2017.

•  Convertible debentures ($75.0 million)

• The maturity date of the convertible debentures will be postponed to November 2017.
• The fixed interest rate will be revised to 6.875% (from 7.5% previously).
• The convertible debentures will be convertible into Osisko shares at any time prior to the due date at the price of $6.25 per share (previously $9.18 per share)

The following table presents the new repayment schedules of the CPPIB loan and the convertible debentures per calendar year once the agreements are finalized: (in millions of dollars):

The agreements are conditional on finalization of documentation to the satisfaction of all parties, obtaining the necessary regulatory authorizations and on payment of transaction fees, which are expected to be all completed by the end of the month of November 2013.

Outlook for 2013

In accordance with the operating plan and the ongoing optimization program, the mill should be operating at the 55,000 tonnes per day name plate capacity during the fourth quarter of 2013. Gold production is estimated at 485,000 ounces for the year. Cash costs per ounce¹⁰  are estimated at approximately $770, a 9% reduction in costs from 2012 with improved operations and higher gold output.

Following the issuance of a new IFRS accounting pronouncement with respect to stripping costs in the production phase of a surface mine, the Company capitalizes stripping costs when they meet the requirements of a stripping activity asset. Capitalized stripping costs are not reflected in the table below. The change in policy has no impact on cash and cash equivalents.

Volatility in the gold price and financial markets in 2013 has led Osisko to review its rate of discretionary spending in exploration and advancing new projects. As a result, the Company decreased discretionary spending for 2013 by over $80 million.

Capital expenditures for 2013 are now estimated at $138 million as follows:

(a)  Excluding variation in accounts payable related to the Canadian Malartic expansion, Hammond Reef, Upper Beaver and Kirkland Lake projects.

Outstanding Share Data

As of November 8, 2013, 437,763,999 common shares were issued and outstanding. A total of 23,100,695  common share options were outstanding to purchase common shares under the Company’s share option plan and 12,500,000 common share purchase warrants were outstanding.

Q3 Conference Call Information

Osisko will host a conference call on Friday, November 8, 2013 at 14:00 ET, where senior management will discuss the financial results and provide an update of the Company’s activities. Those interested in participating in the conference call should dial in approximately five to ten minutes before the start of the conference to allow ample time to access at 1 416 981 9000 (Toronto local and international), or 800 736 4610 (North American toll free). An operator will direct participants to the call.

The conference call replay will be available from 16:00 ET on November 8, 2013 until 23:59 ET on November 22, 2013 with the following dial in number: 1 416 626 4100 or toll-free 800 558 5253, access code 21676744.

NON-IFRS MEASURES OF PERFORMANCE

The Company has included certain non-IFRS measures including “cash costs per ounce”, “cash margin per once”, “adjusted net earnings” and “adjusted net earnings per share”  to supplement its consolidated financial statements, which are presented in accordance with IFRS.

The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. Non-IFRS measures do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures employed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Cash costs per ounce

“Cash costs per ounce” is defined as the production costs of one ounce of gold excluding non-cash costs for a certain period. “Cash costs per ounce” is obtained from “Production costs” and “Royalties” less non-cash “Share-based compensation” and “By-product credits (silver sales)”, adjusted for “Production inventory variation” for the period, divided by the “Number of ounces of gold produced” for the period.

Cash margin per ounce

“Cash margin per ounce” is defined as the “Average selling price of gold per ounce sold” less“Cash costs per ounce produced” for the period.

Adjusted net earnings and adjusted net earnings per share

“Adjusted net earnings” is defined as “Net earnings” less certain non-cash items: “Write-off of property, plant and equipment”, “Share-based compensation”, “Unrealized gain (loss) on investments”, “Impairment on available-for-sale assets”, and “Deferred income and mining tax expense (recovery)”.

“Adjusted net earnings per share” is obtained from the “Adjusted net earnings” divided by the“Weighted average number of common shares outstanding” for the period.