Discoveries earlier this year at the Windfall gold project in Quebec drove Osisko Mining (TSX: OSK) in July to boost its drill program by 200,000 metres, bringing the total for the year to 1 million metres — the largest drill program in Canada.
“When we started at Windfall back in 2015, it was a 50,000-metre program, which was large,” John Burzynski, the company’s president and CEO, tells The Northern Miner. “We wanted to find out in a hurry if it was something we wanted to spend time on.”
Since then the company — which consists of essentially the same team that was responsible for putting the Canadian Malartic mine into production — has increased its drill program each year.
“Windfall is turning out to be that same kind of deposit as Malartic in that it’s always giving us a little bit more than we hoped for,” Burzynski says during a break between meetings at the Beaver Creek Precious Metals Summit. “It’s a very generous deposit.”
Whether Windfall — already one of the highest-grade, resource-stage gold projects in the country — will turn out to be as generous to its shareholders as Canadian Malartic, remains to be seen. Burzynski and his colleagues sold the Malartic mine for $4 billion to Agnico Eagle Mines (TSX: AEM; NYSE: AEM) and Yamana Gold (TSX: YRI; NYSE: AUY) in 2014.
Windfall is already one of the highest-grade gold projects in the country, and results released in June from a 5,500-tonne bulk sample mined from Zone 27 exceeded expectations, returning an average grade of 8.53 grams gold per tonne — 26% higher than predicted by infill drilling on the resource block model. “It was a very good result, in our view, and we can now expect that we’ll probably see higher grades when we do get to mining.”
Results from a second bulk sample, which is being collected from the Lynx zone, should be released at the end of October or early November.
In the meantime, the company continues to release high-grade drill results at regular intervals from the 23 drill rigs on-site.
“One mistake people make is that they don’t put enough drilling into a deposit before they make a production decision,” Burzynski says. “We want to make certain about what we have. At Canadian Malartic we had 17 drill rigs at the peak and drilled about 1.1 million metres, and when you look at what we predicted, it was plus or minus 1%.”
Osisko plans to close off the database at Windfall in mid-December, and update the current resource estimate in late January or early February next year. Already, Windfall has 2.87 million indicated tonnes grading 8.17 grams gold per tonne for 754,000 contained oz. gold, and 10.35 million inferred tonnes averaging 7.11 grams gold for 2.36 million oz. gold.
The deposit is well defined from surface to 900 metres’ depth, and remains open along strike and at depth. Mineralization has been found 30 metres from surface in some areas, and as deep as 2,000 metres in others, with potential to extend mineralization down-plunge and at depth. Burzynski notes that what will be included in the upcoming resource estimate will be everything above a depth of 1,200 metres, and accessible by ramp.
But that isn’t stopping Osisko from drilling much deeper than that. In May, the company said it is going to drill the deepest hole in Canada — Deep Discovery 1 — which will be punched down to a depth of between 3,000 and 3,500 metres to test the company’s deep porphyry intrusion model that it believes is the driver of the Windfall system. So far the hole has reached a depth of 2,300 metres.
“What we want to see are the roots of the system,” he says. “The geological model is that there’s a feeder system at depth that is pushing up the gold into our resource.”
Burzynski says that deep exploration will eventually drive Windfall into the ranks of the world-class, high-grade and long-life underground mines in the Canadian Archean.
“It’s a good deposit as it stands right now, but eventually, given enough time and drilling, it will become another Canadian world-class Abitibi gold mine,” he predicts.
“Nobody ever drills out an entire underground mine before they start mining,” he adds. “Those world-class mines develop into world-class mines over 30 or 50 years of mining.
“As a comparison, they’re down about 3,500 metres at La Ronde and Macassa, and Red Lake went down below 3,000 metres. With this deep hole we’re drilling, we might get a good peek at the system, but our intention isn’t to drill out the resource at great depth. It’s to put some scale into the deposit.”
Mineralization at Windfall so far has been found in four main zones: Lynx, Zone 27, Caribou and Underdog.
Exploration drilling below the Lynx deposit — which occurs alongside and northeast of the main Windfall gold deposit — shows four high-grade zones in a new mineralized corridor the company calls Triple Lynx. The corridor, reported in July, lies below the main mafic unit associated with the Lynx deposit between vertical depths of 650 and 980 metres in an area that is open in all directions, and has seen no previous drilling.
Sixteen of the 23 drill rigs at Osisko are active at Lynx and Triple Lynx, and the rest focus on infill and exploration drilling on other areas of the deposit.
The company reported bonanza grades from both Lynx and Triple Lynx on Sept. 9. Highlights included 72.3 grams gold over 13 metres from 762 metres downhole in hole 19-1272-W1, and 52 grams over 12 metres from 776 metres downhole in hole 19-1272-W2 at Triple Lynx, and 145 grams gold over 4 metres starting 1,313 metres downhole in hole 19-1857-W4 at the Lynx Extension.
Osisko has 273 million common shares outstanding for an $962-million market capitalization.
Over the last year, the company has traded in a range of $2.19 to $3.90 per share. At press time its shares changed hands at $3.52 apiece.
Mick Carew, a mining analyst at Haywood Securities, has a “buy” rating on the stock, and a target price of $4.50 per share.