Osisko’s Malartic tale of guts and glory (June 07, 2011)

When pressed about some of the many challenges he faced developing the Malartic gold deposit in Quebec into a commercial mine during one of the toughest economic times this century, Sean Roosen admits sleep deprivation was one of them.

“I didn’t sleep at all during 2008 and 2009,” the 47-year-old chief executive of Osisko Mining (osk-t) recalls. “I woke up in the spring of 2008 and went back to bed around September 2009. I was waking up every half hour to check my Blackberry.”

Ironically some of the sleepless moments stemmed from having too much money in the bank at a time when most juniors couldn’t raise a cent. 

“Half of Bay Street was calling us to take the company out for cash,” Roosen says, explaining that at one point Osisko’s share price slid to $1.50 but the company had the equivalent of $1.10 per share in cash in its treasury.

“Strangely enough the fact that we went through the financial crisis with cash became our enemy,” he continues. “It turned out that having all that money was almost our Achilles’ Heel.”   

Fortunately for Roosen and his team this story — unlike those of many other juniors trying to navigate the shoals during the economic downturn — had a happy ending and on May 30, 1,150 guests from across Canada, the U.S., and Europe sat down to lunch to celebrate the mine’s official opening and tip their hats to one of the world’s largest undeveloped resources wholly owned by a junior explorer.

After a mine blast and gold pour that was televised live for the audience, Roosen paid special thanks to the residents of Malartic, a small town of about 3,600 people, 20 km west of Val D’or. “Our Quebec team wants to thank the residents of Malartic who have made our job possible,” Roosen told the gathering. “Without them we didn’t have a chance. Without their support this was a non-starter.”

That support came after Roosen and his colleagues knocked on doors in the community and convinced residents that the millions of ounces of gold in the ground would help rejuvenate their community — bringing needed jobs and income to a town where even the local Tim Hortons had been forced to close.

Within six years of acquiring the mining rights to the site in 2004 and drilling 780,000 metres, Osisko physically moved 200 homes, built an entirely new neighbourhood in Malartic, and put the finishing touches on an open pit operation that will produce an average of more than 600,000 ounces of gold a year over a 12.2 year mine life. Operating costs, at US$319 per oz, will put the new Malartic mine firmly in the lowest cost quartile of global gold producers.

With proven and probable reserves of 48.7 million tonnes at 0.8 gram gold per tonne and 295 million tonnes at 1 gram gold per tonne for a total of 10.7 million ounces, Malartic currently represents the biggest gold reserve in Canada and is still growing through ongoing drilling on adjacent mineralized zones.

Guests at the mine opening were quick to sing Roosen’s praises. “Sean is the most gifted and bold new gold mining chief executive of his generation, an exceptional team builder and a very good forward thinker,” David Beatty, the former deputy chairman of Westwind Partners/ Thomas Weisel and now chief executive of Rio Novo Gold, told The Northern Miner.

As lead underwriter the investment bank helped raise Osisko more than $1 billion for the Canadian Malartic mine construction.

Beatty met Roosen six years ago when the company had a market capitalization of less than $100 million and was immediately impressed. “He has built six billion dollars worth of shareholder value from an $85,000 initial investment. It is an incredible track record,” he says.

Beatty also points out that Roosen pre-purchased his SAG, ball mills and his steel before he had the definitive feasibility study at a significant cost savings.  “He knew from the pre-feasibility study that he had an economic project … it was one of the gutsiest, bravest moves we’ve seen in a decade in gold mining.”

Roosen’s career in mining started at 17 when he graduated from high school in Windermere, Ontario and decided to go to the prestigious Haileybury School of Mines.

“I had some cousins up in Sudbury who were miners and they seemed to have a pretty good livelihood,” Roosen explains. “Not being a man of means at the time I decided that getting a job in mining was a priority in my life.”

His first job — at 18 — was as an underground miner at Texas Gulf’s huge Kid Creek mine in Timmins. Roosen later graduated from Haileybury’s three-year program as a mining engineer technologist and it wasn’t long before he ended up in Africa where he spent more than a decade, the first eight years in Abidjan, the commercial capital of Ivory Coast, and the last six in Niger.

Roosen ran his own exploration company and was contracting for ten to twelve juniors doing property acquisition and primary exploration work. At his peak he had about 120 people working for him and was contracting across sub-Saharan Africa.

It was while he was doing work for Etruscan Resources that he met his wife, Sylvie Prud’homme, a Canadian geologist who was working as country manager for Barrick Gold in Niger.

“I pulled up in front of her camp in a big bulldozer one day and now we have a daughter who is ten years old,” Roosen says. “I don’t think she liked me the first time we met but she had a water well and I didn’t and in the middle of the Sahara that’s pretty important.”

It may not have been love at first sight but their chance encounter in a remote corner of Africa ultimately changed the course of Canadian mining history. It was through Prud’homme that Roosen met John Burzynski, who he was to work with later at Osisko.

Prud’homme’s best friend, Caroline Wilson, also a geologist, was married to Burzynski and when the two men returned to Canada from Africa in 2003, Wilson introduced them to geologist Bob Wares, who she had gone to school with at McGill University.

Wares founded Osisko in 1998 — and the rest is history.

Now that the mine is up and running will Roosen could be forgiven for wanting to take some much-needed time off.

But that doesn’t appear too likely.

“I’m thinking I might take a couple of weekends off,” Roosen says.  “But we’ve still got lots of things to worry about. We’ve got all the musical instruments but we’ve got to get the symphony to play together now.”