UPDATE 2-Osisko targets Kirkland Lake assets with Queenston buy

Mon Nov 12, 2012 2:41pm EST
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* Offer of C$6.00 per share at 20 pct premium

* Osisko sets sights on Queenston's Upper Beaver project

* Osisko says acquisition to add 16 pct to its global resources

* Queenston shares jump 15 percent

By Bhaswati Mukhopadhyay and Euan Rocha

Nov 12 (Reuters) - Canadian gold miner Osisko Mining Corp will buy Queenston Mining Inc for about C$550 million ($549 million) on a fully diluted basis to gain access to the Upper Beaver project in Ontario's Kirkland Lake region.

Queenston owns one of the largest land parcels around the Kirkland Lake. Its holdings include over half-a-dozen past producing gold mines such as Upper Beaver, Upper Canada, Sylvanite and Golden Gate, which produced over 3.5 million ounces between 1913 and the mid-1980s, historical records show.

"We thought the opportunity was now ... we saw it (Upper Beaver) as a strategic asset," Osisko Chief Executive Sean Roosen said on a conference call.

The Upper Beaver project, which has a relatively low capital exposure, has necessary permit to begin advanced exploration and is expected to go into production in 2016, Roosen said.   Continued...