Osisko developing high-grade core in new gold zone at Windfall Lake

Osisko Mining Inc. [OSK-TSX] on Tuesday said new results suggest that a high grade core is developing at the Lynx 4 Zone at its 100%-owned Windfall Lake gold project located between Val-d’Or and Chibougamau in the Abitibi region of northern Quebec.

The company said new results from ongoing drilling suggest that the high-grade core in the Lynx 4 Zone is similar to the Lynx 1 discovery zone. That conclusion is based on analytical results from 23 intercepts in 17 drill holes which targeted the Lynx deposit.

Highlights include 415 g/t gold over 5.9 metres and 19.9 g/t gold over 8.8 metres in drill hole OSK-W-17-1166-W1.

Assays are the latest results from an 800,000-metre drill program, which combines definition, expansion and exploration drilling in and around the main Windfall gold deposit and adjacent Lynx deposit, which is located immediately north of Windfall.

The Windfall Lake gold deposit is currently one of the highest grade resource-stage gold projects in Canada. It is estimated to contain 2.7 million tonnes at 8.42 g/t gold (748,000 ounces) in the indicated category and 3.5 million tonnes at 7.62 g/t gold (860,000 ounces) of inferred material.

The bulk of the mineralization occurs in the Main Zone, a southwest/northeast trending zone of stacked mineralized lenses, measuring approximately 600 metres wide and at least 1,400 metres in length. The deposit is well defined from surface to a depth of 500 metres, and remains open along strike and at depth.

Osisko said exploration is advancing quickly and it hopes to release a resources update in the first quarter of 2018, following by a feasibility study in the second half of 2018. It is hopes that mine construction would begin next year. Osisko envisages an underground mining project that would be accessed by two ramps, according to a project description document dated June, 2017.

The processing plant would have a capacity of 1,900 tonnes per day, with a mine life expected to be 10 years. If the processing plant is located at the Windfall mine site, some or all of the tailings will be used as paste backfill.

However, if the processing plant is located near the town of  Lebel-sur-Quevillon, then waste rock, to which cement will be added, will serve as the primary source of backfill. It is also possible that the tailings could be transported from a processing plant near Lebel-sur-Quevillon to the mine site to supplement the cemented waste rock as backfill.

Osisko Mining shares advanced $0.09, or 2.7%, to $3.46 in trading, Tuesday, January 23, 2018. The shares are trading in a 52-week range of $5.65 and $3.14. Osisko says it continues to be well financed with approximately $190 million in cash and investments. It also holds additional properties in northern Quebec and Ontario.