Osisko Mining delivers positive PEA update for Windfall
Osisko Mining Inc. is providing significant positive results from the independent Preliminary Economic Assessment (“PEA”) prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101") on its 100% owned Windfall gold project located in the Abitibi greenstone belt, Urban Township, Eeyou Istchee James Bay, Québec.
The PEA provides a robust base case assessment for developing the Windfall gold deposit as an underground dual ramp-access mine with a central processing mill at the site. The study includes drill results available as of November 30, 2020. Osisko is rapidly advancing surface and underground work at Windfall, with over 8.5 kilometres of underground exploration ramp, recently achieving 500 metres vertical depth (see Osisko news release dated March 25, 2021).
Highlights
- First 7 years of full production: 300,000 oz Au per year average, 8.1 g/t Au average diluted grade
- Peak recovery of 328,000 oz Au in year 6; average production over 18 year life of mine (“LOM”) of 238,000 oz Au per year (based on MRE database as of November 2020)*
- 50.6% Pre-Tax Internal Rate of Return (“IRR”), 39.3% After-Tax IRR; C$2.6 Billion Pre-Tax Net Present Value (“NPV”), C$1.5 Billion After-Tax NPV; After-Tax Payback Period 2.2 years from start of production
- Average annual after-tax free cash flow of C$253 Million in the first seven years of full production (C$1.8 Billion cumulative), cumulative LOM after-tax free cash flow of C$2.6 Billion
- AISC of US$610/oz Au
- Capital expenditure (“Capex”) of C$544 Million (includes power line construction and C$55 Million as contingency in direct and indirect costs), NPV/Capex ratio of 2.7
- PEA assumes 3,100 tonnes per day (“tpd”) milling operation
- Average gold recovery of 94.8%; total operating cost of C$122/tonne
- Windfall will generate over C$8.2 Billion of gross revenue and C$1.7 Billion in taxes
- Creation of approximately 400 direct jobs and 200 indirect jobs during operation, over 500 jobs during construction
*Cautionary Statement - The reader is advised that the PEA summarized in this news release is intended to provide only an initial, high-level review of the project potential and design options. The PEA mine plan and economic model include numerous assumptions and the use of inferred mineral resources. Inferred mineral resources are considered to be too speculative to be used in an economic analysis except as allowed for by NI 43-101 in PEA studies. There is no guarantee that inferred mineral resources can be converted to indicated or measured mineral resources, and as such, there is no guarantee the project economics described herein will be achieved.
Osisko Chief Executive Officer John Burzynski commented: “The sum of our work to date outlines the very strong base-case for a significant and highly profitable new gold mine in Québec . This PEA is an important interim update on the progress of our extensive work program at Windfall, with a robust 39% after-tax IRR and C$1.5 Billion after-tax NPV using US$1,500 oz gold. We believe this highly positive PEA is conservative. The eventual inclusion of high-grade infill results received since November 2020, and the results we anticipate as we complete the infill drilling for the Definitive Feasibility Study (“DFS”) by the early fall of 2021, should convert a significant number of additional high-grade mineral resource estimate (“MRE”) inferred ounces to the measured and indicated categories. In the next 12 months we are focused on completing drilling, the DFS, optimizing the capital program and operating plans, and securing project financing, as we advance our goal to move the project to first production in 2024.”
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