Fundamental view
Osisko Development’s Q2‑2025 release shows operating expenses of C$ 12.3 million, up 8 % versus Q2‑2024, while the per‑unit production cost (C$ 0.84 per barrel of oil‑equivalent) has slipped to a new low – ‑3 % versus the same quarter last year and roughly 5 % below the average of the three listed peers in the Canadian mid‑stream space (C$ 0.88‑0.92). The modest rise in total operating spend is driven mainly by a higher head‑count and expanded drilling‑services footprint, but the cost‑per‑barrel advantage reflects the successful implementation of the “Lean‑Well” initiative that has trimmed SG&A and logistics outlays. Over the past 12 months, Osisko’s per‑unit cost has fallen from C$ 0.89 to C$ 0.84, out‑performing the sector’s modest 1‑2 % decline and positioning the company as the most cost‑efficient operator in its peer set.
Trading implications
- Relative‑value play: The cost‑per‑unit edge gives Osisko a higher margin buffer than peers, supporting a premium to the sector‑wide EV/EBITDA multiple (≈ 9.5× vs. 8.5‑9.0× for peers). The market is still pricing the stock at a 7‑month‑low P/E of ~12×, leaving upside potential if the cost trajectory holds.
- Short‑term catalyst: Management’s next capital‑budget update (expected in early Oct) will likely detail further “Lean‑Well” roll‑outs. A confirmation of continued per‑unit cost compression could trigger a breakout above the 20‑day SMA (~C$ 42.5) and a bounce toward the Q2‑2025 resistance at C$ 45.
- Risk: The 8 % YoY rise in total operating spend signals that any unexpected cap‑ex or wage‑inflation shock could erode the cost advantage. A widening gap between operating cost growth and peer‑group expense trends would be a bearish signal and may prompt a pull‑back toward the 50‑day SMA (C$ 40.8).
Actionable stance – With the cost advantage intact and a clear upside catalyst on the horizon, a light‑to‑moderate long position (or a “buy‑on‑dip” at the current C$ 41.5‑42.0 range) is warranted. Keep a stop just below the 20‑day SMA to protect against a potential cost‑inflation surprise, and monitor the upcoming capital‑budget release for confirmation of further per‑unit cost compression.