Osisko Mining Inc. [OSK-TSX; OBNNF-OTC] on Wednesday April 7 released a positive preliminary economic assessment (PEA) for its 100%-owned Windfall Gold deposit in Eeyou Istchee James Bay, northern Quebec.
The company said the PEA provides a robust base case assessment for developing the Windfall gold deposit in an underground dual ramp-access mine with a central processing mill at the site. The study includes drill results available as of November 30, 2020.
Osisko is rapidly advancing surface and underground work at Windfall, with over 8.5 km of underground exploration ramp, recently achieving 500 metres vertical depth.
The PEA envisages average production of 300,000 ounces annually during the first seven years of full production at an average grade of 8.1 g/t gold. The PEA also foresees a peak recovery of 328,000 ounces in year six, and average production of 238,000 ounces annually over an estimated mine life of 18 years. The all-in-sustaining cost is pegged at US$610 an ounce.
Other highlights include average annual after-tax cash flow of $253 million in the first seven years of full production, and cumulative life-of-mine after-tax cash flow of $2.6 billion.
The PEA considers a capital expenditure of $544 million, including power line construction and a $55 million contingency.
“Windfall will generate over $8.2 billion in gross revenue and $1.7 billion in taxes,” Osisko said.
“The sum of our work to date outlines the very strong base-case for a significant and highly profitable new gold mine in Quebec,” said Osisko CEO John Burzynski. “The eventual conclusion of high-grade infill results received since November 2020, and the results we anticipate as we complete the infill drilling for the definitive feasibility study (DFS) by the early fall of 2021, should convert a significant number of additional high-grade mineral resource estimate inferred ounces to the measured and indicated categories,” Burzynski added. “In the next 12 months we are focused on completing drilling, the DFS, optimizing the capital program and operating plans, and securing project financing, as we advance our goal to move the project to first production in 2024.”
On Wednesday, shares eased 4.2% or $0.13 to $2.94 on volume of 667,160.
The Windfall gold deposit hosts Measured and Indicated resources of over 6.0 million tonnes of 9.6 g/t gold and 5.9 g/t silver, or 1.85 million oz gold and 1.15 million oz silver. Inferred resources are 16.4 million tonnes of 8.0 g/t gold and 2.7 g/t silver, or 4.2 million oz gold and 1.4 million oz silver.