Osisko warms to Threegold prospects

Two of Threegold Resources‘ (THG-V) gold prospects in Quebec’s Abitibi region have showed up on Osisko Mining‘s (OSK-T) radar this year. 

Threegold’s flagship Adanac gold project was the latest of the two to grab Osisko’s attention, the first being the Standard gold property. 

On May 26, Osisko signed an option agreement to earn 51% of Adanac by spending $4.5 million in exploration over four years and paying $600,000 in cash.

Osisko could boost its interest by 19% to earn up to 70% by spending an additional $10 million in exploration or by taking Adanac to feasibility.

Located in the heart of the Abitibi greenstone belt and south of the Cadillac-Larder Lake break, Adanac is underlain by Pontiac and Temiscaming metasedimentary rocks that have been strongly deformed and sheared. The gold property contains 91 claims and spans 32.7 sq. km. 

Threegold says three historical shafts are found on the property, which produced an unknown amount of gold in the 1930s, mainly from the Adanac shaft that extends to a depth of 98 metres.

The company adds that the project saw a 4,500-metre drill program in 2009, which helped outline a 1.8-km gold corridor. 

The Adanac news follows an earlier announcement in May where Osisko bought 8.6 million Threegold shares on the open market, giving it a 9.2% interest in the junior. 

Osisko president and CEO Sean Roosen said in a press release that Threegold has an “attractive” precious metal property package and Osisko is looking to take part in the junior’s ongoing exploration programs. 

“They know we have the potential to acquire great properties in the Abitibi region,” comments Threegold’s investor relations representative Sylvain Laberge on Osisko’s purchase. 

Osisko, which poured its first gold bar at the Canadian Malartic gold mine in the Abitibi gold belt in April, is working on becoming a major gold player with its flagship mine, which reached commercial production in late May.

A 2008 feasibility study outlined that an open-pit operation at the mine would churn out 575,000 oz. gold a year over 16 years. Reserves at Canadian Malartic stand at 10.7 million oz. from 343.7 million tonnes grading 0.97 gram gold per tonne. 

Osisko is currently exploring projects at Canadian Malartic Extension and Malartic CHL, which it optioned from Golden Valley Mines (GZZ-V). It inked a few other option agreements last year in Quebec, Ontario and Nova Scotia. 

In February 2011, Osisko optioned to earn up to 70% of Threegold’s Standard gold project about 50 km away from Malartic. 

Under the agreement, Osisko must spend $4 million in exploration over five years and pay $300,000 in cash to earn 51%
of the Standard gold property.
It earns up to 70% by spending another $6 million on exploration or by taking the project to feasibility.

Laberge says Osisko could start drilling at Standard in June, adding that Osisko plans to spend around $500,000 on the program.

The project hosts the historic Standard gold mine, which was in production between 1935 and 1953, to produce an unknown amount of gold. However, the mine’s historical resource has been estimated at 132,750 tonnes of 5.43 grams gold per tonne. 

Threegold acquired Adanac along with three other properties, after its parent company, Dianor Resources (DOR-V), spun off its gold resources into what became Threegold Resources in 2006.