Osisko Metals Incorporated (TSX-V: OM) (OTCQX: OMZNF) (FRANKFURT: 0B51) is pleased to announce the 2019 Mineral Resource Estimate Update for its 100% owned Pine Point Project, located near Hay River, in the Northwest Territories of Canada. The 2019 MRE was prepared by BBA Inc. Cut-off grades are based on estimated long-term metal prices, mining costs, metal recoveries, concentrate transport, and smelter costs.
Highlights:
Jeff Hussey, President & CEO of Osisko Metals, commented: “Following our maiden MRE in December 2018, we are very pleased to again demonstrate significant asset growth at Pine Point. Global zinc and lead projects with all supportive infrastructure and more than 50Mt in near-surface resources are extremely rare and we are delighted that Pine Point now enters this select group. There is a depleted pipeline of quality zinc development projects globally and we believe Pine Point will place Osisko Metals at the forefront of junior base metal exploration and development companies.”
“Having achieved our objective of increasing the resource base to the 50Mt threshold, we now believe that the Project could develop into a mine large enough to enter the top 10 global zinc mines on an annual zinc-in-concentrate basis. We would also emphasize that exploration at Pine Point has been minimal in the last 30 years, we believe there is more to come for the Project.”
The 2019 MRE is divided into five geographic zones, each zone composed of individual deposits (see Pine Point Property Map and Table 1).
Table 1: Inferred 2019 Mineral Resource Estimate for Pine Point as reported by BBA
Method | Area | Cut-off Grade (ZnEq %) | Tonnage | ZnEq | Pb | Zn |
(kt) | (%) | (%) | (%) | |||
Pit Constrained Resources | Central | 1.85 | 4,200 | 7.81 | 2.01 | 5.80 |
East Mill | 1.85 | 8,600 | 5.10 | 1.23 | 3.86 | |
North | 1.85 | 16,400 | 6.18 | 1.80 | 4.38 | |
West | 2.00 | 9,200 | 8.82 | 2.96 | 5.86 | |
N-204 | 2.10 | 9,500 | 4.53 | 0.97 | 3.58 | |
Underground Resources | Central | 5.00 | 2,700 | 7.57 | 1.60 | 5.97 |
West | 5.00 | 1,800 | 9.11 | 3.67 | 5.43 | |
Total Pit Constrained | 1.85 – 2.10 | 47,900 | 6.31 | 1.78 | 4.54 | |
Total Underground | 5.00 | 4,500 | 8.19 | 2.43 | 5.76 | |
Total Combined | 52,400 | 6.47 | 1.83 | 4.64 |
Notes:
Sensitivity to Cut-Off Grades
Cut-off grades lower than 1.80% ZnEq do not significantly change the Inferred Mineral Resource (Table 2), indicating that the bulk of mineralization is above 2% ZnEq. Higher cut-off grades significantly increase the average grade of the deposit, as expected, with a complimentary drop in tonnage.
Table 2: Pit Constrained Inferred Cut-Off Grade Sensitivity
Area | Cut-off Grade (ZnEq %) | Tonnage | ZnEq | Pb | Zn |
(kt) | (%) | (%) | (%) | ||
ALL | 7.00 | 12,893 | 11.86 | 3.68 | 8.18 |
6.00 | 17,122 | 10.53 | 3.19 | 7.34 | |
5.00 | 23,173 | 9.21 | 2.72 | 6.50 | |
4.00 | 31,305 | 7.98 | 2.30 | 5.69 | |
3.00 | 40,332 | 6.98 | 1.98 | 5.00 | |
2.00 | 47,178 | 6.34 | 1.79 | 4.55 | |
1.80 | 48,062 | 6.26 | 1.76 | 4.49 | |
1.60 | 49,042 | 6.16 | 1.74 | 4.43 | |
1.40 | 49,975 | 6.08 | 1.71 | 4.37 | |
1.20 | 50,840 | 6.00 | 1.69 | 4.31 | |
1.00 | 51,612 | 5.92 | 1.67 | 4.25 |
The in-pit Inferred MRE is constrained within pit shells that were developed from a pit optimization analysis that was done with Hexagon’s Mine Plan software using the economic and operating parameters presented below:
Table 3: Pit Optimization Parameters
Parameter | Unit | Input |
Mine Site Costs | ||
Mining Cost – Overburden | C$/t mined | 2.00 |
Mining Cost – Mineralized Material | C$/t mined | 3.00 |
Mining Cost – Waste | C$/t mined | 3.00 |
Mine Dewatering Cost1 | C$/t mined | 0.88 |
Pre-concentration Cost | C$/t mineralized material | 8.50 |
Processing Cost2 | C$/t milled | 20.60 |
G&A Cost2 | C$/t milled | 17.00 |
Recoveries | ||
Pre-concentration Mass Pull | % | 59.5% |
Overall Zinc3 | % | 87.0% |
Overall Lead3 | % | 92.0% |
Zinc Concentrate Grade | % | 59% |
Lead Concentrate Grade | % | 64% |
Zinc Concentrate Costs | ||
Transport to Rail | C$/wmt | 30.00 |
Transport to Smelter | C$/wmt | 180.00 |
Smelter Cost | C$/dmt | 295.00 |
Lead Concentrate Costs | ||
Transport to Rail | C$/wmt | 30.00 |
Transport to Smelter | C$/wmt | 203.00 |
Smelter Cost | C$/dmt | 262.00 |
Metal Prices | ||
Zinc | US$/lb | 1.15 |
Lead | US$/lb | 0.95 |
Exchange Rate (CAD:USD) | 1.31 |
1 Applied to both mineralized material and waste tonnages
2 Costs per tonne milled are based on a 59.5% Weight Recovery inclusive of fines
3 Inclusive of mineralized material sorting test program results; Lower concentrate and recoveries expected at N204
The Project continues to benefit from supportive infrastructure that includes paved roads, rail (accessible in Hay River) and hydro-electrical power. The site also benefits from one hundred kilometres of pre-existing haul roads from the original mining operation, providing access to all major deposit areas at Pine Point.
Underground Mineralization
The underground portion of the 2019 MRE utilizes similar financial and smelting assumptions to the pit-constrained portion of the 2019 MRE. Importantly, it differs from estimates calculated by previous operators and comprises easily accessible mineralization found adjacent to the pit wall boundaries of certain deposits, as well as mineralization that is relatively continuous over longer distances between pit-constrained mineralization.
Table 4: Underground Inferred Cut-Off Grade Sensitivity
Area | Cut-off Grade (ZnEq %) | Tonnage | ZnEq | Pb | Zn |
(kt) | (%) | (%) | (%) | ||
West and Central | 7.00 | 2,225 | 10.55 | 3.39 | 7.15 |
6.00 | 3,106 | 9.38 | 2.89 | 6.49 | |
5.00 | 4,499 | 8.17 | 2.41 | 5.76 |
The K69 cross-section shows a typical cross-section with both pit constrained and underground mineralization. Underground mineralization outlined in the 2019 MRE could be accessed by ramp at the bottom of adjacent pits.
Metallurgy
Following metallurgical test work completed during Q2-2019, zinc and lead mineralization demonstrated recoveries and concentrate grades with conventional flotation (see press release dated August 7. 2019). Historically, Pine Point produced among the cleanest concentrates globally over its 24-year mine life. The resulting zinc and lead concentrates from our test work were analyzed for impurities and deleterious elements. Based on the results, at this time, Osisko Metals does not anticipate any smelter or refinery penalties for Pine Point concentrates and believes the historical quality will be replicated. Table 5 summarizes the main deleterious elements analyzed in the zinc concentrate and lists typical minimal threshold for smelter penalties.
Table 5: Concentrate Elemental Analysis
Element | Symbol | Unit | Reported Concentration | Typical Smelter Penalty Threshold |
|
Arsenic | As | ppm | Less than 2 | 2,000 | |
Antimony | Sb | ppm | Less than 0.5 | 1,000 | |
Bismuth | Bi | ppm | Less than 0.1 | 1,000 | |
Cadmium | Cd | ppm | 864 | 4,000 | |
Cobalt | Co | ppm | 3 | 1,000 | |
Copper + Lead | Cu + Pb | % | 0.23 | 3.0 | |
Fluorine | F | ppm | Less than 20 | 300 | |
Iron | Fe | % | 2.6 | 8.0-9.0 | |
Magnesium | MgO | % | 0.36 | 0.35 | |
Manganese | Mn | ppm | 100 | 12,500 | |
Mercury | Hg | ppm | 0.31 | 50 | |
Silica | SiO2 | % | Less than 0.21 | 3.5 |
2019 and 2020 Drill Program
The brownfield exploration campaign is expected to continue into H1-2020 and will be testing high-potential target areas with a focus on high grade “prismatic” type deposits. Compilation work is ongoing and is being combined with the airborne gravity gradiometry survey completed in August 2019 and the LIDAR topographic surveys flown in 2018.
Drilling completed in 2018 and early 2019 was incorporated into this latest MRE. The objective of this previous drilling campaign was to decrease drill spacing to 30 meters from 40 to 60 meters in the central core of the Project. While this objective is still part of the plan, no Indicated Mineral Resources are being declared in the 2019 MRE. A concurrent resampling program of historical drilling was initiated in Q2-2019 as multiple historical holes in the database listed with no assays were found to contain significant mineralization. This is expected to positively impact future updates to the Pine Point MRE as a grade of zero was applied to these holes.
Notes Regarding Mineral Resource Estimate
About Osisko Metals
Osisko Metals Incorporated is a Canadian exploration and development company creating value in the base metal space with a focus on zinc mineral assets. The Company controls Canada’s two premier zinc mining camps. The Company’s flagship projects are: 1) the Pine Point Mining Camp, located in the Northwest Territories, has an Inferred Mineral Resource of 52.4 Mt grading 4.64% zinc and 1.83% lead (6.47% ZnEq), making it the largest pit-constrained zinc camp in Canada; 2) The Bathurst Mining Camp, located in northern New Brunswick, has Indicated Mineral Resources of 1.96 Mt grading 5.77% zinc, 2.38% lead, 0.22% copper and 68.9g/t silver (9.00% ZnEq) and Inferred Mineral Resources of 3.85 Mt grading 5.34% zinc, 1.49% lead, 0.32% copper and 47.7 g/t silver (7.96% ZnEq) in the Key Anacon and Gilmour South deposits. In 2019, the Company will continue to diligently develop and explore in order to confirm and grow both projects. The Company is also active in Quebec where it is advancing multiple base metal targets.
The Inferred Mineral Resource Estimate mentioned in this press release conform to National Instrument 43-101 standards and were prepared by independent qualified persons, as defined by NI-43 101 guidelines. The above-mentioned mineral resources are not mineral reserves as they do not have demonstrated economic viability. The quantity and grade of the reported Inferred Mineral Resources are conceptual in nature and are estimated based on limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological, grade and/or quality continuity.
Images accompanying this announcement are available at
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