Osisko counts 7.4 million oz gold at Windfall ahead of feasibility study

As it pushes toward completing a feasibility study by year-end for its high-grade Windfall gold deposit in Eeyou Istchee James Bay, Que., Osisko Mining (TSX: OSK) has released an updated resource outlining a total of 7.4 million ounces. 

The updated resource is based on nearly 1.9 million metres of drilling. In the measured and indicated category, Windfall now contains 4.1 million oz. in 11.1 million tonnes grading 11.4 grams gold per tonne. This is a 26% increase in ounces and an 8% increase in grade from the company’s last resource estimate in January 2022. About three–quarters of the ounces are attributable to the Lynx deposit.

The inferred category contains 3.3 million oz. in 12.3 million tonnes grading 8.4 grams gold. About half of these ounces occur in the Lynx deposits.

To calculate the resource estimate, Osisko used a gold price of US$1,600, a recovery rate of 93%, and a 3.5 grams gold per tonne cut-off grade.

The new resource estimate covers the Lynx, Underdog, Main, and Triple 8 deposits to a depth of 1,200 metres from surface. Processing results from a bulk sample taken from the Lynx 600 (Triple Lynx) zone this year are expected in early October. In a release, Osisko CEO John Burzynski noted that previous bulk sample results returned higher grades than those indicated by drilling. (Returned grades for two previous bulk samples were 26% and 89% higher than anticipated.)

Burzynski said the resource update “met and exceeded” the company’s objectives for the Windfall program — a robust measured and indicated resource of over 4 million oz. with an average grade of over 10 grams gold per tonne.

“The scale of Windfall and the deposit grade has steadily increased since Osisko’s discovery of Lynx in late 2016. Lynx now represents almost two-thirds (65%) of the total gold in the (resource), and it continues to impress” with a standalone measured and indicated resource of 3.1 million oz. averaging 13 grams gold per tonne, he added.

In a note to clients, Haywood Capital Markets mining analyst Kerry Smith noted that the resource has further to grow — although Osisko’s near-term focus will be on the upcoming feasibility study.

“The current resource extends from surface to 1,200 metres vertical depth, and remains open at depth. Osisko has drilled to ~2.7 km vertical depth, has intersected ore grade at this depth, and we expect the vertical continuity over time will at least double.”

Smith, who notes the project is already “world class,” expects the mid-term resource target at Windfall is more than 10 million ounces.

Osisko Mining stock closed down 6¢ or 2.3% this afternoon in Toronto at $2.54 per share, giving the company a market capitalization of $903 million. The stock has traded in a 52-week window of $2.33 and $5.02.