O3’s Vizquerra powers Marban Alliance toward feasibility

O3 Mining (TSXV: OIII; US-OTC: OIIIF) president and CEO Jose Vizquerra has a simple goal.

“My purpose, personally, is to be the first Peruvian to build a mine in Canada, and that differentiates me as a CEO from my peers,” he told The Northern Miner in an interview.

Since its reverse takeover in July 2019 of Chantrell Ventures to become O3 Mining, the company has moved its flagship Marban Alliance gold project in the Val d’Or region of western Quebec higher up the value curve as the centrepiece of Vizquerra’s ambition.

The Marban project saw a preliminary economic assessment completed by Osisko Mining a year earlier, followed by a prefeasibility study in September last year, and a planned production start by 2026.

But for Vizquerra, this ambitious journey doesn’t merely come from a boardroom strategy or a desire to chart O3’s golden path on Canadian soil.

Hailing from Peru, a nation with a rich mining tradition, Vizquerra has helped shape the fortunes of several prominent mining companies. Before taking the helm at O3 Mining, Vizquerra acted as the executive vice-president of Osisko Mining (TSX: OSK). Earlier in his career, he acquired ground-level experience as a production and exploration geologist at the Red Lake gold mine in Ontario.

While the company has achieved several critical milestones at Marban Alliance, Vizquerra points out that the company is looking to improve on previous economic assessments. Whereas the company cannot control gold prices, it can control the recoveries in its proposed flow sheet and via growing the quality and volume of the existing Marban resource, said Vizquerra.

“Initially, we started with 1.7 million oz. gold. Today, we have 2.9 million oz. in total. We have proven that we can increase the amount of resources,” he said during a recent industry conference.

Value in the ground

Early in September last year, O3 completed a prefeasibility on Marban Alliance that demonstrated its potential to be a significant gold producer.

The study outlined strong financial prospects, with a post-tax net present value of $463 million and an internal rate of return of 23.2%, assuming a stable gold price of US$1,700 per oz. and a USD to CAD exchange rate of 77.

The project’s estimated output was pegged somewhat higher at 161,000 oz. gold, supported by improvements in mining and milling efficiencies.

The project requires an initial investment of $435 million, covering mine pre-production, infrastructure, and other essential facilities, promising a return of 1.1 dollars per dollar invested. The study predicts an all-in sustaining cost of US$882 per oz., allowing for a 3.5-year post-tax payback and generating $760 million of free cash flow over a decade.

Vizquerra said the study’s results were encouraging, emphasizing the project’s profitability in a time of rising costs.

Vizquerra noted the potential for the project economics to improve further in the upcoming feasibility study.

“The company is considering leveraging existing processing infrastructures in these areas to reduce costs and enhance operational efficiencies. It might also imply forming synergies or partnerships to secure these infrastructures,” he said.

Marban hosts combined open pit and underground resources of 67.7 million tonnes grading 1.09 grams gold per tonne for 2.4 million oz. indicated, and 3.2 million inferred tonnes grading 2.21 grams gold for 223,000 oz. of contained metal.

In late June, O3 announced its first resource estimate for the Malartic H openpit, calculating 342,000 oz. grading 1.04 grams gold per tonne.

The deposit is within 5 km of the planned processing plant. There is a lot of potential for further exploration, as it’s situated between the extensions of the Marbenite and Norbenite shear zones, with opportunities to expand both horizontally and further underground.

Drilling underway

This year, about 30,000 metres of drilling will underpin the feasibility study in parallel with optimization trade-off studies underway.

O3 announced initial results from a 1,806-metre drill program in the adjoining Upper Camflo area on Aug. 24. This program focused on the up-dip extension of a gold-bearing structure previously identified during Barrick Gold‘s (TSX: ABX; NYSE: GOLD) historical exploration drilling at the former Camflo mine. Barrick closed the mine in 1992.

O3 made a near-surface discovery at Camflo, including an intercept in hole O3MA-23-503, revealing a grade of 1.6 grams gold per tonne over a section of 1.5 metres.

O3 in July also announced promising results from its 2023 winter drilling campaign at the Marban Alliance project’s Hygrade Fold area. The results include 33.3 grams gold per tonne over 3.4 metres at a 138-metre depth, revealing high-grade zones still open.

Vizquerra highlighted the potential for finding other high-grade deposits even at shallow levels within the project area, noting encouraging drill results, particularly between the Malartic H resource area and the Marban Alliance prefeasibility study zone.

The campaign successfully expanded known high-grade mineralized zones and verified the potential for further exploration and expansion in the Orion 10 zone, Vizquerra said.

The results indicate the potential to expand the resource boundaries. Vizquerra hinted at plans to extend the drilling program across the Marban Alliance property to discover larger deposits later this year.

Project rebranding

In June, O3 changed the name of its flagship project to differentiate its development strategies and better demonstrate its commitment to stakeholder inclusivity and environmental sustainability, according to Vizquerra.

The company has rebranded its flagship project, Marban Engineering, to Marban Alliance, reflecting its commitment to flowing benefits to all regional stakeholders, the CEO said. In addition to the advanced development stage project, the company also holds the early-stage Horizon project. Formerly the Marban Regional project, O3 has consolidated its regional exploration initiatives in the Malartic-Rivière-Héva area into Horizon.

The project site, spanning 125 sq. km and has housed six past-producing mines, is strategically positioned near significant gold deposits, including the Canadian Malartic mine.

O3 shares are up 11% over the past 12 months at $1.41 apiece, having touched $1.13 and $1.79. It has a market capitalization of $105.3 million.