Resource and grade growth bodes well for Osino’s Twin Hills prefeasibility

Osino Resources (TSXV: OSI; US-OTC: OSIIF) has released an updated resource estimate for the Twin Hills gold discovery in Namibia, which could add more ounces to the company’s impending prefeasibility study expected out by September.

The new resource (at a 0.5 grams gold per tonne cut-off) holds 2.75 million troy oz. in the measured and indicated categories grading 1.13 grams per tonne in 6.7 million tonnes of material. At a 0.3 gram gold per tonne cut-off, the resource holds 2.83 million troy oz. at 1.08 grams per tonne in 81.3 million tonnes.

The deposit holds another 240,000 oz. gold in the inferred category at 1.05 grams per tonne.

Osino ascribes the higher grades compared to the earlier estimate to applying more discrete resource modelling and adding higher-grade material via the drill bit during the last few months.

The new resource estimate comprises 93% of material in the measured and indicated categories, compared with the 77% previously.

Echelon Capital Markets analyst Ryan Walker pointed out in a research note the resource includes a higher-grade portion when applying a 0.9 gram per tonne cut-off grade, totalling 2 million oz. at 1.46 grams per tonne in 42.7 million tonnes.

It holds the potential for selective mining to yield a potentially “very meaningful impact” on eventual project economics, wrote the analyst.

“By example, the abovementioned PEA was most sensitive to changes in grade or gold recovery, with a 10% change in either yielding a 27% change in the planned project’s after-tax NPV,” said Walker.

The resource comprises (by size) the Bulge, Twin Hills Central, Clouds, Clouds West, Kudu and Oryx (Twin Hills West) and Twin Hills North deposits.

“The updated estimate will now form the basis of the expanded (contemplating a plant throughput rate of at least 5 million tonnes per annum, compared with 3.5 million tonnes under the July 2021 PEA) Twin Hills PFS and reserves calculation (at US$1,700 per oz.) expected in early September 2022,” said Walker.

Most of the resource growth in the new estimate came from Twin Hills West, with contribution from two new emerging zones of mineralization at Clouds West and Twin Hills North. The estimate employs 212,184 metres of drilling in 1,016 holes completed since 2019.

In July, the company acquired the Ondundu gold exploration property in Namibia for US$15.2 million from Canadian gold major B2Gold (TSX: BTO; NYSE-AM: BTG) in its efforts to become Namibia’s ‘next gold mining champion.’ Ondundu is an advanced-stage gold exploration project located 250 km. northwest of Windhoek in the Erongo region.

At 76¢ a share, Osino’s Toronto-traded shares continue to trade at 35% below the year-earlier value. Osino has a market capitalization of $105.7 million.