Osisko Mining Corporation

Osisko Mining Corporation

August 11, 2009 09:35 ET

Osisko Signs Option Agreement With Midland Exploration for the Dunn Gold Property

MONTREAL, QUEBEC--(Marketwire - Aug. 11, 2009) - Osisko Mining Corporation ("Osisko") (TSX:OSK)(FRANKFURT:EWX) is pleased to announce the signing of an option agreement with Midland Exploration Inc. ("Midland") (TSX VENTURE:MD) for the Dunn gold property, located approximately 35 kilometres northeast Rouyn-Noranda in the Abitibi region of Quebec. The property consists of 51 claims covering about 1990 hectares in Clericy and La Pause townships.

Osisko can acquire a 50% interest in the Dunn property during a three-year period in consideration of i) total cash payments of $140,000, including a payment of $50,000 upon signing and ii) a total of $1,300,000 in exploration expenditures, including a minimum of $320,000 in the first year (firm commitment). Upon acquiring a 50% interest, Osisko will have the option to acquire an additional 15% interest by delivering a bankable feasibility study under the following conditions: i) annual cash payments of $40,000 and ii) a minimum of $200,000 of exploration work each year until the delivery of a bankable feasibility study within a three-year period. Alternatively, Osisko can acquire an additional 15% interest by solely assuming all exploration and development work on the Dunn Property, earning a 1% additional interest for every $1,000,000 spent on the property, up to a maximum of $15 million. Midland will be the operator until completion of a positive pre-feasibility study.

The Dunn property offers excellent potential for gold mineralization as it covers an 8 kilometre-long stretch of the Manneville fault zone, a secondary splay fault that is an offshoot of the well-known Destor-Porcupine fault, a major gold-bearing structure in the Abitibi. The geological setting on the Dunn property is similar to that of the South Barnat deposit on Osisko's Canadian Malartic property, i.e. fault-juxtaposed clastic sediments and ultramafics cut by a porphyry dyke swarm. Gold showings occur east and west of the property along the Manneville fault, including relatively recent finds by Typhoon Exploration and Cartier Resources. The 8 kilometre stretch of the fault structure on the property has seen less than ten drill holes from previous exploration programs.

A $540,000 exploration program will begin immediately that will include geological mapping and ground geophysics (magnetic and induced polarization) and drilling of selected anomalies (2000 metres).

Osisko Mining Corporation is currently developing the Canadian Malartic gold deposit and adjacent mineralized zones into a large-scale open pit, bulk-tonnage mining operation. The Company is well-funded with $400 M in working capital and is carrying out an aggressive mine development, reserve definition and exploration campaign. The Canadian Malartic deposit currently represents one the biggest gold reserves in Canada for a single deposit, and is still growing through ongoing drilling on new mineralized zones. Current reserves for the Canadian Malartic property are 6.28 million ounces, plus a global measured and indicated resource of 3.65 million ounces and an inferred resource of 0.84 million ounces (including the adjacent South Barnat deposit).

Cautionary Notes Concerning Estimates of Mineral Resources

This news release uses the terms measured, indicated and inferred resources as a relative measure of the level of confidence in the resource estimate. Readers are cautioned that mineral resources are not economic mineral reserves and that the economic viability of resources that are not mineral reserves has not been demonstrated. In addition, inferred resources are considered too geologically speculative to have any economic considerations applied to them. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies or economic studies except for Preliminary Assessment as defined under NI 43-101. Readers are cautioned not to assume that further work on the stated resources will lead to mineral reserves that can be mined economically.

Forward Looking Statements

Certain statements contained in this press release may be deemed "forward-looking statements". All statements in this release, other than statements of historical fact, that address events or developments that the Corporation expects to occur, are forward looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential", "scheduled" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although the Corporation believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, including, without limitation that all technical, economical and financial conditions will be met in order to put the Canadian Malartic Project into commercial production, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include gold prices, access to skilled consultants, mining development and mill production personnel, results of exploration and development activities, the Corporation's limited experience with production and development stage mining operations, uninsured risks, regulatory changes, defects in title, availability of personnel, materials and equipment, timeliness of government approvals, actual performance of facilities, equipment and processes relative to specifications and expectations, unanticipated environmental impacts on operations market prices, continued availability of capital and financing and general economic, market or business conditions. These factors are discussed in greater detail in the Corporation's most recent Annual Information Form filed on SEDAR, which also provides additional general assumptions in connection with these statements. The Corporation cautions that the foregoing list of important factors is not exhaustive. Investors and others who base themselves on the Corporation's forward-looking statements should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. The Corporation believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release.

Contact Information

  • Osisko Mining Corporation
    John Burzynski
    Vice-President Corporate Development
    Osisko Mining Corporation
    Sylvie Prud'homme
    Investor Relations
    Toll Free: 1-888-674-7563