(Kitco News) – Osisko Development (NYSE:ODV, TSXV: ODV) yesterday announced the results of an independent feasibility study (“FS”) for the company’s 100%-owned Cariboo gold project, located in central British Columbia.
In its press release, the company said that the FS outlines a robust and scalable phased development base case with low initial capital intensity of C$137.3 million and attractive operating costs for the underground development of the Cariboo gold project, producing approximately 1.87 million ounces of gold over a 12-year mine life.
The project is expected to generate C$502 million after-tax net present value at a 5% discount rate (pre-tax C$691 million) at a base case gold price of US$1,700 per ounce, with 20.7% after-tax internal rate or return (pre-tax 24.4%) and C$901 million cumulative after-tax life-of-mine free cash flow.
The FS envisions 163,695 ounces of average annual gold production over 12 year mine life at US$968/oz LOM average all-in sustaining costs. Probable mineral reserves contain 16.7 million tonnes at an average grade of 3.78 g/t gold for a total of 2.03 Moz of gold.
Initial production (Phase 1) in the first three years contemplates a 1,500 tpd operation from the Lowhee, Shaft and Mosquito deposits, yielding average annual production of 72,501 ounces.
Concurrently, underground development will advance to ramp up operations to 4,900 tpd in year four, increasing average annual production to 193,798 ounces in Phase 2, with potential to scale production further in the future.
The company said that underground mining will be conducted using highly-mechanized, low-cost bulk tonnage methods designed to target the extraction of ore contained in gold vein corridors.
A pre-concentration ore sorting facility is expected to significantly improve processed grades by separating non-mineralized material from ore, while substantially reducing processing volumes, energy costs, and the overall environmental impact footprint of the operation with fewer tailings, reduced water usage and ability to use waste as backfill, it added.
Importantly, Osisko noted that the company remains on track for completing the environmental assessment process early in the second quarter of 2023 and anticipates receiving final permits by the end of 2023.
Chair of the Board and CEO Sean Roosen commented, “This feasibility study demonstrates that the Cariboo gold project will be a large-scale, long-life and profitable gold mine. It will also produce significant quantities of gold in its initial years at a capital cost below C$140 million.
“By phasing construction, we have minimized our exposure to development risk at Cariboo, optimized the sequencing of the assets in our portfolio and maximized our ability to scale Cariboo to reach its full potential in the future. We envision Cariboo as a project that will be a cash flow engine for the company for decades into the future.”
Osisko Development indicated that its objective is to become an intermediate gold producer by advancing its 100%-owned Cariboo gold project, located in central BC, Canada, the recently acquired Tintic project in the historic East Tintic mining district in Utah, U.S.A., and the San Antonio gold project in Sonora, Mexico.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
Read More:Osisko announces positive FS results for its Cariboo gold project with after-tax NPV of C$502M
2023-01-04 17:38:00
