Osisko adds additional NSR on Barkerville gold project
Barkerville Gold Mines resource and development 2018 - 2019. Looking northeast - 6 km of 67 km mineralized trend. Source: Barkerville Gold Mines Ltd.
Osisko Gold Royalties Ltd. [OR-TSX, NYSE] said Thursday Deptember 6 that it has acquired an additional net smelter royalty interest in Barkerville Gold Mines Ltd.‘s [BGM-TSXV; BGMZF-OTC; IWUB-FSE] flagship Cariboo gold project in central British Columbia.
Osisko has entered into a second restated agreement with Barkerville to acquire another 1.75% net smelter return royalty on top of the 2.25% existing NSR on the Cariboo Project for a total of $20 million. Osisko has a further option to purchase another 1% NSR for $10 million, bringing the total NSR to 5%.
As part of the transaction, Barkerville will grant to Osisko 10 million common share purchase warrants at an exercise price of around $0.75. Following the transaction, Osisko ownership would represent 34.7% of Barkerville common shares.
Backed by Osisko Gold Royalties Ltd. and Osisko Mining Inc. [OSK-TSX], Barkerville is moving ahead with big plans to develop an underground mine and milling operation on the company’s extensive land package, which covers 2,100 km2.
During an interview posted on Barkerville’s website, President and Chief Executive Officer Chris Lodder said he envisages initial production of 150,000 ounces of gold annually from an operation that might cost between $300 million and $400 million to develop.
Cariboo currently hosts 1.6 million ounces of gold in measured and indicated resources and a further 2.6 million ounces in the inferred resource category. The property’s mineral tenures cover 1,950 km2 along a strike length of 67 km, which includes several past producing placer and hard rock gold mines.
Measured, indicated and inferred resources at the site are contained in the Cow and Island Mountain deposits, the company has said. The underground mineral resource estimate incorporates the Cow and Valley Zones on Cow Mountain and Shaft Zone and Mosquito Creek on Island Mountain at cut-off grade of 3.0 g/t gold. A mineral resource on Bonanza Ledge and BC Vein is also included, the company said in a press release on May 2, 2018.
The company has said the development timetable includes the launching of a feasibility study this year, followed by the launch of a permitting process and possible mine commissioning in 2021.
On August 23, 2018, the company released additional drilling results from the 50,000-metre 2018 Island Mountain exploration and delineation program at Cariboo. It said infill drilling results continue to demonstrate continuity and expansion of modelled vein corridors at both the Shaft Zone and Mosquito Zone on Island Mountain. Highlights from recent drilling on the Mosquito Zone include 14.70 g/t over 23.60 at a vertical depth of 120 metres.
Given the nature of vein corridors at the site, extensions down dip and along strike are highly plausible, Barkerville has said. Drilling has occurred to depths of 600 metres from surface. The company said it plans to drill down dip and along strike of mineralized vein corridors to define additional resources at Cow Mountain and Island Mountain.
On Thursday, Barkerville shares rose 2.78% to 37 cents. The stock is trading in a 52-week range of 91 cents and 35 cents.