Osisko Gold makes discovery at Cariboo regional target

Osisko Gold Group (TSX: OSG) said early drilling at its Proserpine target near the Cariboo gold project in British Columbia has outlined a new mineralized system that could support future open-pit mining alongside a planned underground operation. The stock soared.

Standout hole PSP-26-004 cut 4.6 metres grading 95.93 grams per tonne gold from 110 metres depth, including a 50-centimetre interval of 873 grams gold from 112 metres downhole, Osisko Gold said Wednesday in a statement. Another hole, PSP-26-001, cut 8.6 metres grading 5.46 grams gold from 97 metres depth, as well as 14.5 metres of 2.17 grams gold from 572 metres.

“The first batch of intercepts provides an encouraging proof-of-concept that Proserpine could become a meaningful contributor to future resource growth at Cariboo,” National Bank Financial mining analyst Don DeMarco said in a note.

“While the exceptional grades are noteworthy, in our view the more important takeaway is the scale, where drilling has defined mineralization over only a small portion of a much larger target that remains open in all directions.”

Osisko Gold jumped 12.2% to $3.83 Wednesday morning in Toronto, valuing the company at about $1.2 billion (US$836 million). The stock has traded between $3.07 and $6.63 in the past year.

The Toronto-based company changed its name from Osisko Development last month.

Several targets

Located about 7 km from Cariboo, Proserpine is one of several regional targets being tested as part of an exploration campaign aimed at identifying additional deposits. Some 26,500 metres of drilling are planned at Proserpine, initially with three rigs.

Results to date have expanded the footprint of known mineralization at Proserpine to about 1 km along strike by 500 metres in width, with mineralization remaining open in all directions. All 14 holes that reached their intended target depths encountered mineralization from near surface to about 400 metres downhole.

Other drilling highlights include hole PSP-26-009, which cut 5.5 metres of 3.17 grams gold from 408 metres downhole, and hole PSP-26-003, which intersected 12.4 metres of 1.46 grams gold from 367 metres depth.

Historic camp

Located in the historic Wells-Barkerville mining camp, about 500 km north of Vancouver, Cariboo is Osisko’s main development project. It includes a permitted underground mine and processing complex.

Construction work has been advancing while underground drilling continues to refine the mine plan and test extensions to mineralization beyond the current reserve base. Recent deep drilling has extended gold mineralization below 700 metres vertical depth, reinforcing the project’s long-term growth potential.

A 2025 feasibility study for Cariboo envisions a scalable underground operation expected to produce about 1.89 million oz. gold over a 10-year life. Based on a 5% discount rate and a US$2,400 ($3,360) per oz. gold price, the project has an after-tax net present value of $943 million and a 22.1% internal rate of return.

Cariboo hosts about 17.4 million measured and indicated tonnes grading 2.88 grams gold for contained metal of 1.61 million oz. gold, according to a 2025 resource. It also holds 18.8 million inferred tonnes grading 3.09 grams gold for contained metal of 1.86 million oz. gold.