Four days after Osisko Mining (OSK-T) and Clifton Star Resources (CFO-V) released a resource estimate for the Beattie deposit – part of their larger Duparquet project – Clifton Star reported that Osisko is withdrawing from the project.
The news sent shares of Clifton Star down 24¢ or 10%, to close at $2.13 on June 17. The company’s shares rebounded when markets reopened on June 20, rising 37¢ or 17.4% to close at $2.50 per share. At presstime the junior traded at $2.65 per share.
Clifton has about $15 million in cash, and said it plans to start its own drill program at Duparquet soon.
Osisko was unavailable for immediate comment, but confirmed that it had terminated its agreement with Clifton to earn a 50% interest in the property.
According to the resource
estimate released on June 13, the Beattie deposit has an inferred resource of 56.2 million tonnes grading 1.53 grams gold per tonne, for 2.77 million oz. contained gold at a cutoff grade of 0.67 gram gold.
The base case, in-pit inferred resource was calculated at 32 million tonnes grading 1.67 grams gold for 1.72 million oz. gold, based on a Whittle-optimized pit shell simulation using estimated operating costs, a gold price of C$1,100 per oz. and a cutoff grade of 0.67 gram gold per tonne.
At a gold price of C$1,500 per oz., the in-pit inferred resource rises to 2.5 million oz. gold at an average grade of 1.39 grams gold. This adds 780,000 oz. compared to the $1,100 pit shell, and a corresponding lower cutoff grade of 0.49 gram gold per tonne.
The resource estimate doesn’t include other parts of the Duparquet project, such as Donchester, Central Duparquet, Duquesne or Beattie tailings deposits, Osisko noted.
The in-pit estimate was based on a mining cost of $1.50 per tonne, and a processing cost of $20 per tonne. It was also based on an 85% gold recovery rate and a pit wall slope angle of 50 degrees.
The resource was put together from 127,540 metres of drilling by Clifton Star in 2008 and 2009, and Osisko’s 2010 drill program.
The dimensions used for the $1,100 Whittle shell were 1,600 metres in length and 850 metres in width, with a vertical depth of 400 metres.
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