Osisko ups Windfall M&I gold estimate by 73%

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Osisko Mining Inc. [OSK-TSX] has released an updated resource estimate for its wholly-owned Windfall Gold deposit in Eeyou Istchee James Bay, Quebec.

According to the latest estimate, Windfall contains 3.2 million ounces of gold in the measured and indicated category at an average grade of 10.5 g/t. On top of that is an inferred resource of 3.6 million ounces averaging 8.6 g/t gold.

Osisko said the estimate reflects the results of approximately 1.7 million metres of drilling, with 1.5 million completed by since October, 2015, and includes all drilling completed as of September, 2021, and all analytical results received as of October 20, 2021.

An additional 70,000 metres of infill and expansion drilling have been completed since September, 2021, the company said in a press release. It said the additional drilling and outstanding analytical results, together with continuing and underground drilling, will be integrated into the database for the pending feasibility study expected to be completed in the fourth quarter of 2022.

The updated estimate was announced after the close of trading on January 10, 2022. On Tuesday, the shares rose 0.27% or $0.01 to $3.64 and now trade in a 52-week range of $3.88 and $2.33.

“Infill drilling has again exceeded our expectations, with excellent conversion and the measured and indicated resource increasing by 73% with the average gold grade moving past the double digits to 10.5 g/t,” said Osisko CEO John Burzynski. “We are confident that as we complete the remaining infill work in the coming months, the resource will continue to grow and we should again see incremental increase in what is already a strong average grade.”

Back in April, 2021, the company released a positive preliminary economic assessment (PEA) for the Windfall project.

Osisko 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.

At that time, Osisko was rapidly advancing surface and underground work at Windfall, with over 8.5 kilometres of underground exploration ramp, 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 forsees 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. It also envisages the creation of approximately 400 direct jobs and 200 indirect jobs during operation. During the construction phase, approximately 500 employees would be required.


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