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Canadian Malartic. Source: Osisko Mining.

With the deadline approaching on Goldcorp's (NYSE:GG) hostile takeover of Osisko Mining (NASDAQOTH:OSKFF) and management stating there didn't seem to be any alternative bids coming from investors to accept, rival Yamana Gold (NYSE:AUY) has swept in with a counteroffer to steal the Canadian jewel out from underneath it.

Yamana's white knight offer has it buying a 50% interest in Osisko's mining and exploration assets for $400 million with the two jointly operating its flagship Canadian Malartic project in northern Quebec, making it unlikely (though not improbable) that Goldcorp makes a counteroffer. Additionally, two of Canada's largest pension funds, which are also two of Osisko's lenders, will participate in the transaction with one giving Osisko $275 million in up-front payments in return for a stream of future production from Malartic and the other rolling over an existing loan for the miner while increasing it by $275 million into a new credit facility.

Taken as a whole, these two transactions are worth about $550 million, and together with Yamana's contribution, puts the investment at $930 million, or gives Osisko a valuation of about $3.1 billion, which is substantially higher than Goldcorp's $2.5 billion bid -- although that makes the possibility greater the miner just walks away from its takeover effort because it would almost by necessity need participation by the pension funds itself. The complexity of Yamana's counteroffer means this might not be a done deal just yet.

Osisko has maintained Goldcorp was lowballing its valuation because of the depressed industry conditions. While using similar average price to net asset values of other leading gold miners would put Osisko's stock at around $10 or more per share -- a premium to where its stock had been trading after Goldcorp's bid -- the fact that Barrick Gold (NYSE:ABX), Newmont Mining (NYSE:NEM), and others have been hunkering down and having to sell assets and cut costs meant it would be difficult for them to ride to the rescue.

But Yamana hasn't been facing quite the same constraints as its rivals, and it remains a healthy participant that, along with Goldcorp, has been looking for acquisitions to bump up its production.

It's for that reason that Goldcorp might not turn tail. Although the government is said to be supportive of Yamana's offer because the deal keeps Osisko's headquarters in Quebec, something they've been looking for, Goldcorp won't readily find 600,000 ounces of production that matches the quality of Malartic that Osisko is offering.

The jousting for position might not be over, though it does appear at the moment that Yamana Gold has knocked Goldcorp out of the saddle.

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