Vancouver-based Goldcorp Inc. has made a $2.6-billion takeover bid for Montreal gold company Osisko Mining Corp. that it says is part of its focus on investment in low political risk jurisdictions.

The deal values Osisko at $5.95 a share, up 15 per cent on its Friday closing price of $5.17. Osisko stock jumped 20 per cent this morning and closed today at $6.24.

​

Goldcorp is offering a combination of cash and its own shares for the company, which operates primarily in Canada and Mexico.

Osisko is developing the Canadian Malartic gold mine, a significant gold find in the Abitibi region of Quebec, and also has projects in Hammond Reef and Kirkland Lake areas of Northern Ontario.

Goldcorp says it expects long mine life and low sustainability costs from these projects, which have about 10 million ounces of gold in reserve. It says the Osisko takeover dovetails with its other investments in Quebec and Ontario.

Goldcorp CEO Chuck Jeannes said the deal provides earnings and cash flow potential for his company.

"From a risk standpoint, it’s got very low technical risk because it’s already in production and the ore body is fairly simple and understandable," he said in an interview Tuesday with CBC's The Lang & O'Leary Exchange.

"It’s got low capital risk because the capital’s already been invested – we’ve seen a lot of capital appreciation in our business over the last while – so that’s behind them. And it’s got low political risk," he added.

Osisko hasn't commented publicly on whether its board supports the takeover offer, which is being made directly to Osisko shareholders.

​

But Jeannes acknowledged it was an unsolicited offer.

"We have been working on this for some time. We know the folks at Osisko quite well. We know the asset well. We’ve had numerous conversations...most recently in the fall of last year when they decided to stop any discussions with us. We just decided it was time to let the shareholders decide," he said.

John Ing, president and chief executive of investment firm Maison Placements Canada, said Goldcorp will likely have to sweeten the offer if it wants to close the deal or face a rival.

"The reality is it's a miserly bid," Ing said, referring to the 15 per cent premium to Osisko's closing share price before the offer by Goldcorp.

Jeannes disagreed, pointing out that shareholders will get cash and Goldcorp shares, which have the same potential for growth if gold prices rebound.

“If you look at it in the context of how our shares have traded with Osisko’s over a several-year period, it’s right about at the average," he said.

The long-term outlook for gold is diminishing, as the price of the metal declines. Gold was trading at $1,250 US an ounce on Monday, up from its lows in December after declining by nearly 30 per cent last year.

The falling price of gold has put pressure on the mining sector, where some companies have sold more difficult properties and others have looked at consolidation. But it also lowered stock prices, with Osisko dropping from the $8 a share range last year.

After a big writedown in the second quarter of 2013, Goldcorp returned to positive earnings territory in the third quarter, with net profit of $190 million, or $0.23 per share.

In a conference call with analysts, Jeannes said the proposal was not about making his company bigger.

"Our strategy has never been about size, it's been about getting better and delivering disciplined and sustainable growth," Jeannes said.