Osisko Mining bulk sample averages 65.5 grams gold per tonne

Osisko Mining (TSX: OSK) continues to explore at its Windfall gold project in the Abitibi greenstone belt, Eeyou Istchee James Bay, Que., between the towns of Abitibi and Chibougamau.

Recently it mined a 4,809-tonne bulk sample from the 600 level of the Lynx deposit. The sample averaged 65.5 grams gold per tonne. 

The actual grade of the material processed was 169% higher than the block model predictions. Modelling predicted a grade of 38.9 grams gold.

“These results continue to support our thesis that Windfall is world class,” Kerry Smith, an analyst at Haywood Securities wrote in a research note.

Osisko previously processed bulk samples from zone 27 and Lynx 311. They were mined using long hole methods. All returned reconciliations higher than predicted: zone 27 was 8.5 grams gold (6.8 grams gold predicted) and Lynx 311 was 17.8 grams gold (9.4 grams gold predicted).

“All three bulk samples have outperformed grade expectations and in our view the results show that mining at Windfall has the potential to exceed the average M&I resource grade of 11.4g/t,” Andrew Mikitchook, a mining analyst covering the company at BMO Capital Markets commented in a research note.

“In our view, with three bulk samples now complete, Osisko is building a track record of positive grade reconciliation that shows the potential for mining at Windfall to outperform the capped grades in the block model.”

The Lynx 600 bulk sample contained 10,135 oz. gold and 4,378 oz. silver. During treatment, a total gold recovery rate of 93.1% was achieved by flotation, including 52.2% gold recovery in the gravity concentrate. The gravity concentrate averaged 14,339 grams gold and the flotation concentrate 408.2 grams gold.

“While the Lynx 600 zone is somewhat of an outlier in terms of grade, zones with above-average grade particularly within Lynx in our view could make a positive impact on the economics of any eventual full-scale mining at Windfall,” Mikitchook noted. “For reference, the M&I resource at Windfall averages 11.4g/t with Lynx averaging 13g/t.”

The high-grade Windfall gold project contains 4.1 million oz. of gold in 11.1 million measured and indicated tonnes grading 11.4 grams gold, plus 12.3 million inferred tonnes grading 8.4 grams gold.

The deposit remains open along strike and at depth, and mineralization has been identified at surface in some areas and as deep as 2,625 metres in others. The company says there is “significant potential to extend mineralization down-plunge and at depth.”

Mikitchook notes that Osisko “is advancing a feasibility study for Windfall by year-end and also recently announced a regional exploration program that will drill 10,000m at exploration targets in the Windfall region starting early 2023.”

Smith of Haywood Securities noted that he expects Windfall “could be in production by early 2025 at ~300,000 oz. per year over a 14-year mine life, with AISC (all-in sustaining cost) below US$700 per ounce.”

“Mineralization has been intersected as deep as 2,625 metres below surface and we believe the potential at Windfall is +15M ounces over time,” Smith added, “with additional upside on the regional land package of over 2,400 sq. km.”