Osisko shows interest in Quebec junior

Osisko Mining (OSK-T) has bought 8.6 million shares of Threegold Resources (THG-V) on the open market, giving it a 9.2% interest in the junior, which has gold prospects in Quebec’s Abitibi region.

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

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

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

In February, Osisko signed an option agreement to earn up to 70% of Threegold’s Standard gold (or Duverny) property in the Abitibi region.

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 can boost that to 70% by spending another $6 million on exploration or by taking the project to feasibility.  

Laberge says Osisko could start drilling at the property in June, adding the exact details and how much Osisko will spend on the program are still in the air.  

The Duverny property hosts the past-producing Standard gold mine, which was operating 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.

Laberge adds that the company’s main focus is the Adanac gold project, 8 km east of Rouyn-Noranda.

The 1.7-sq.-km property saw a small drill program in 2009, which helped outline a 1.8-km gold corridor at Adanac. Threegold plans to drill another 4,000 metres on the property this year.

The company acquired Adanac along with three other properties, after its parent company, Dianor Resources, spun off its gold resources into what became the Venture-listed Threegold Resources in 2006.