Osisko confirms new high-grade zone near Windfall

Osisko Mining (TSX: OSK) has drilled 2 metres grading 67.1 grams gold per tonne and 2.2 metres at 38.67 grams gold per tonne at the Golden Bear discovery, 1,000 metres north of its high-grade Windfall gold deposit in Quebec’s Abitibi greenstone belt.

The 50,000-metre drill program has confirmed the Golden Bear discovery zone (D1) and intersected two new mineralized zones. Drilling 50 metres southeast of D1 has defined D2, a parallel gold zone. D3, a third parallel zone of significant sulphide mineralization, was drilled 200 metres southeast of D1. All three zones display visible gold.

The D1 zone has been traced 170 metres along strike with a plunge to the east-northeast. Drill hole ODK-UB-21-273 returned 2 metres grading 67.1 grams gold per tonne (60 metres up-plunge from the discovery intercept (D1) of 27.40 grams gold per tonne over 6.7 metres in drill hole OSK-UB-21-232, which was reported in mid-June).

Two other holes returned 2 metres at 14.9 grams gold per tonne (OSK-UB-21-264), 50 metres down-plunge from the discovery intercept; and 2.2 metres at 26.53 grams gold per tonne  (OSK-UB-21-272), 70 metres down-plunge from the discovery hole. 

The D2 zone returned 2 metres grading 62.15 grams gold per tonne in hole OSK-UB-21-261, about 50 metres to the south-east of D1.

The D3 zone is defined by one assay from hole OSK-UB-21-276: 2.2 metres grading 38.67 grams gold per tonne, about 200 metres south-east of D1.

Assay results are pending from a second hole stepped out 250 metres east of the first hole.

“Golden Bear is looking like a significant discovery, albeit very early days, and three drill rigs are now drilling, with more rigs to be added once the Windfall infill program reaches completion,” Kerry Smith, an analyst at Haywood Securities commented in a research note.

Osisko says Golden Bear is a “blind” discovery in a geological setting similar to Windfall. The Windfall deposit has an alteration and mineralized footprint of over a four-km strike length and to a vertical extent of 3 kilometres. 

The Windfall preliminary economic assessment updated in April covered the Lynx, Underdog, Main and Triple 8 zones. The Lynx zone has a measured resource of 521,000 tonnes grading 11.3 grams gold per tonne for 189,000 contained ounces. The indicated resource includes the Underdog and Main zones and is 5.5 million tonnes grading 9.4 grams gold per tonne for 1.7 million contained ounces. The total inferred resource from all four zones stands at 16.4 million tonnes grading 8 grams gold per tonne for 4.2 million contained ounces.

Kevin MacKenzie, who covers Osisko for Canaccord Genuity, noted that the latest drill results from Golden Bear “again underscore the greater prospectivity of the Windfall project, and the potential to uncover additional centres of mineralization.”

“While Golden Bear remains an early-stage discovery prospect, we note the potential, with ongoing exploration success, for the zone to evolve into something more material,” he added, noting that the “proof of concept” is “well established” with the discovery in 2016 of the Lynx zone. 

Canaccord’s MacKenzie has a price target of $6.75 per share and Haywood’s Smith has a price target of $7.75 per share.

At presstime the company was trading at $2.78 per share within a 52-week trading range of $2.67 and $4.45 apiece. The company has a market cap of about $977 million.