Osisko up 27% on BC Mines Act approval news
Osisko Development Corp. [ODV-TSXV] said the BC Mines Act permits for its Cariboo Gold project in central British Columbia have been approved. This marks an important milestone, enabling the company to move forward with the construction and operation of the Cariboo project.
The shares rallied strongly on the news, rising 27.4% or 56 cents to $2.60. The shares trade in a 52-week range of $4.20 and $1.89.
“Receipt of the construction and operating permits for the Cariboo Gold Project is a major milestone and monumental achievement for Osisko Development and its stakeholders,’’ said Osisko Development Chairman and CEO Sean Roosen.
“It is the culmination of almost five years of extensive discussion and consultation with provincial regulators, Indigenous nations and host communities in ensuring the project becomes a model for responsible mine development and environmental stewardship that redefines mining for a better future,’’ Roosen said.
With the key Project construction and operating permits secured, and the remaining Environmental Management Act permits referred to the Statutory Decision Maker of the Ministry of Energy and Climate Solutions – with a decision expected shortly – the company is advancing discussions, which are active and ongoing, on various funding options, including a comprehensive financing package.
Back in January, 2023, Osisko released the results of a feasibility study for the Cariboo gold project.
It outlines a robust and scalable phased development base case with low initial capital intensity of $137.3 million and attractive operating costs for underground development, producing 1.87 million ounces of gold over a 12-year mine life.
Initial production (Phase 1) in the first three years contemplates a 1,500 tonne per day operation from the Lowhee, Shaft and Mosquito deposits, yielding average annual production of 72,501 ounces. Concurrently, underground development will advance to ramp up to 4,000 tonnes-per-day in year four, increasing average annual production to 193,798 ounces in Phase 2, with potential to scale production further in the future. Gold production of 223,000 ounces annually is anticipated during peak operations.
The Phase 2 expansion is expected to require $451.1 million in capital expenditures, including $36.7 million in contingency costs.
The feasibility study is based on probable mineral reserves of 16.7 million tonnes at an average grade of 3.78 g/t for a total of 2.03 million ounces of gold.
The company said progress continues on the ongoing bulk sample and underground development of the Lowhee Zone alongside the optimized feasibility study work, which are slated to be completed in the first quarter of 2025 and second quarter of 2025 respectively.
Additionally, work advances on other pre-construction activities, including certain detailed engineering and project execution work. Execution on these milestones will play a crucial role in ongoing financial discussions.
Meanwhile, the company said a positive investment decision and the engagement on a project financing package in the coming months would allow for full-scale construction to commence in the second half of 2025 with a targeted completion date at the end of 2027.