Osisko Metals (TSX: OM) has released assay results for four holes completed at the Central zone, around the O53 deposit, within its past-producing Pine Point zinc and lead project in the Northwest Territories.
The drill holes, which returned high-grade intercepts from areas outside of the pit-constrained resource model, were designed to determine the vertical extent of the mineralization in the core of the O53 deposit.
Drill highlights include 18 metres of 2.52% lead and 11.53% zinc starting at 29 metres; 3 metres of 0.61% lead and 8.45% zinc from 54 metres; and 29 metres of 6.24% lead and 23.9% zinc starting at 22 metres.
According to Osisko Metals, the 29-metre intercept has extended high-grade mineralization by 10 metres below the currently modelled pit boundary. Results from the hole returning the 3-metre interval above also suggested mineralization 135 metres west of the O53 deposit and indicated “potential for a new tabular deposit extending westward at shallow depths,” the company stated.
The resource model has defined the O53 deposit over 313 metres of strike, down to a maximum depth of 63 metres and over an average width of 50 metres.
In a news release, Jeff Hussey, Osisko Metals’ president and chief operating officer, noted how these most recent results include “impressive high-grade intersections from the O53 prismatic deposit as well as extension(s) of mineralization, indicating new high-grade mineralization.”
Hussey added that assays for additional holes completed around O53 are pending. The company also defined regional targets around ten additional existing deposits at the project, as well as targets based on individual historical mineralized holes and areas defined through geophysics.
“There is ample potential for new discoveries and continued expansion of resources across the entire Pine Point project,” Hussey concluded.
Drilling is ongoing at the 466-sq.-km project. This work is focused on expanding high-grade mineralization in the Central and East Mill zones at Pine Point. Osisko has also started geophysical surveys, targeting high-priority areas.
Osisko’s Pine Point features 12.9 million indicated tonnes grading 4.56% zinc and 1.73% lead (6.29% zinc-equivalent) with additional inferred resources of 37.6 million tonnes of 4.89% zinc and 1.91% lead (6.8% zinc-equivalent).
According to the company, 80% of these resources are pit-constrained.
In June, the company released a preliminary economic assessment (PEA) for the property, which outlines an 11,250-tonne-per-day open-pit and underground operation, mining 47 small open pits and eight high-grade shallow underground deposits.
Pine Point previously produced 64 million tonnes grading 7% zinc and 3.1% lead between 1964 and 1987.
Pierre Vaillancourt, a mining analyst at Haywood Securities, said he was encouraged by the initial drill results.
“While the contribution from prismatic deposits remains to be determined, we expect that the existing resource from tabular deposits can be expanded well beyond the current 52.4 Mt grading 4.64% zinc and 1.83% lead (6.47% zinc equivalent),” he wrote in a research note to clients. “Regionally, Osisko Metals has numerous targets defined around ten more deposits in the resource model that are open as well as stranded historical mineralized holes and geophysical targets.”
Vaillancourt recommended buying ahead of further drilling. “Although the stock is down 20% year-on-year, we believe the company has added value, including a PEA in June, and will continue to enhance the project through the potential for new discoveries and expansion of resources across the Pine Point project.”
He has a target price on the stock of 75¢ per share. At press time in Toronto, the company’s shares were trading at 39.5¢ within a 52-week trading range of 24¢ and 57¢.
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