High-grade results at Lynx target expand Osisko’s Windfall project

Engineers examine gold-bearing mineralization underground at the Windfall project. Credit: Osisko Mining

Osisko Mining (TSX: OSK) reported on Wednesday assay results as high as 286 grams gold per tonne from its Lynx target in the Abitibi greenstone belt in the Eeyou Istchee James Bay region of Quebec. 

The drilling at Lynx, part of the larger Windfall project returned highlights that extended wireframes including 2.1 metres grading 286 grams gold per tonne in WST-22-1218, a 30-metre extension below the Triple Lynx wireframe 3188; 2.1 metres grading 20.5 grams gold in WST-22-1294, a 60-metre down plunge extension of Lynx Main wireframe 3388; and 6.6 metres grading 12.4 grams gold per tonne from 65 metres depth in WST-22-1296, a 100-metre down plunge extension of the same wireframe.

“While Windfall has commenced the permitting process with the recent submission of our Environmental Impact Assessment, we have continued our work to improve our understanding of the continuity and extent of the MRE with drills on infill and expansion holes in the deposit,” Osisko CEO John Burzynski said in the news release. “Today’s expansion results add good potential to increase the scale of defined areas of mineralization, and have also served well to identify additional areas to target new extensions of Windfall.”

The assay highlights were among 81 intercepts from 45 drill holes and three wedges, part of the 55,000 metres of additional drilling undertaken since the feasibility study was released six months ago. 

Analyst Kerry Smith with Haywood Capital Markets said in a research note on Wednesday that with Windfall being one of the best undeveloped gold projects in Canada, Haywood expects the project to reach at least 10 million mineable ounces over time due to its “tremendous” exploration potential. 
 
He maintains a “buy” rating for Osisko and a target price of $5.50 per share.

Osisko closed a $100 million bought deal private placement in February. The funds will be used to advance the Windfall project towards production.

Containing over 1 million oz., the project is the highest-grade gold deposit ever discovered in Quebec. It includes proven and probable reserves of 12.2 million tonnes grading 8.06 grams gold, containing 3.2 million oz. 

The Windfall feasibility base case uses a gold price of US$1,600 per oz., outlines an operation with an after-tax net present value of $1.2 billion with a 9% discount and an after-tax internal rate of return of 34%. The initial capex was estimated at $788.6 million, and payback would take only two years. The life of mine average annual production will be 306,000 oz. of gold. 

Osisko shares traded at $4.21 on Wednesday afternoon in Toronto, in a 52-week window of $2.36 and $4.65, valuing the company at $1.6 billion.

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