Osisko Mining Corporation

Osisko Mining Corporation

March 26, 2007 07:18 ET

Osisko Announces $22 Million Drill Program at Canadian Malartic

MONTREAL, QUEBEC--(CCNMatthews - March 26, 2007) - Osisko Exploration Ltd. (TSX VENTURE:OSK) (FRANKFURT:EWX) is pleased to provide the following update on its 100% owned Canadian Malartic project. Based on recent recommendations by RSG Global Consulting ("RSG"), independent resource estimate consultants for the project, Osisko management has outlined the following program for the period extending to Q2 2008 :

- Complete a comprehensive 30-metre grid infill drill program on the Canadian Malartic deposit. This program, currently in progress, will cover sections 3140E to 4580E, i.e. a strike length of 1440 meters. It will total 150,000 metres and will be completed by the end of Q4 2007.

- Release a second inferred resource estimate by the end of Q2 2007, which will include the Sladen Extension of the deposit (from section 3140E to 5000E).

- Release a third resource estimate update by the end of Q3 2007, which will add a portion of the southeastern extension of the deposit into the inferred category and will include the western portion of the deposit (sections 3140E and 3730E) into the measured and indicated ("M&I") category.

- Release a comprehensive NI 43-101 M&I resource estimate by Q1 2008 for the main portion of the deposit that will have been covered by the 30-metre grid infill drill program (sections 3140E to 4580E).

- Maintain an aggressive exploration program on the property into Q2 2008, including an additional 20,000 metres of drilling.

A budget of $22 million has been allotted for the planned 170,000 metre drill program, including continued exploration drilling. This expenditure will be offset by a $9.5 million Quebec government refundable tax credit on exploration expenditures. Osisko currently has five drills on site and will increase production to 15,000 metres per month. Osisko will mobilize a sixth drill on the property to allow for continued exploration drilling outside the current resource block.

Over 100,000 metres have been drilled by Osisko on the deposit to date, including 26,000 metres of 30-metre infill drilling at the western end of the deposit (between sections 3140E to 3730E). The balance of the infill drilling (to section 4580E) will total approximately 125,000 meters and is estimated to be completed by the end of 2007. Approximately 42,000 metres of Osisko drilling data were included into the inferred resource estimate released on December 6, 2006, and an additional 43,000 metres will be included in the Q2 2007 inferred resource update.

The 30-metre grid infill program will:

- significantly augment the existing database and increase its accuracy and confidence level, especially for material previously excluded from the inferred resource calculation (i.e. grade blocks averaging less than 0.5 g/t Au);

- potentially allow for lower in-pit cutoff grades and corresponding reduced strip ratios;

- improve the accuracy of the 3D void model pertaining to underground workings;

- allow for more detailed grade distribution models that will be used in eventual reserve calculations and design of starter pits.

Osisko filed a NI 43-101 compliant inferred resource report on SEDAR in January 2007, with part of the report dedicated to detailing the methodology applied by RSG in integrating the historic Lac Minerals and Canadian Malartic Mines drill assay database (approximately 178,000 sampled metres) with the recent drilling carried out by Osisko (approximately 37,000 sampled metres). RSG arrived at their final inferred resource estimates after considering and incorporating the following information:

- a potential 20% positive (artificially high) gold grade bias exists in the 1935-1965 Canadian Malartic Mines database. This potential grade bias does not affect the historic Lac Minerals database nor the recent Osisko database. This bias was compensated for in the RSG inferred resource calculation using industry standard geostatistical methods and reduced rock densities in higher grade areas. Osisko's infill drilling program will supply additional assay data that may reduce or eliminate the currently estimated bias on historic data, which could result in an improved average grade for the deposit and increase the overall contained gold ounces in the M&I category. The historic data have been deemed acceptable for inferred resource estimates, and the final decision to include the historic database, or portions thereof, for the eventual M&I resource estimate will await the results of the completed infill program;

- the 3D void model used in the resource calculation was generated by RSG from the survey records of the underground workings (stopes). A discrepancy exists between the tonnage of the model (9.1 million metric tones) and total tonnage of processed ore at the Canadian Malartic Mine (9.9 million metric tones). The discrepancy between the two figures represents less than 0.5 percent of the inferred resource tonnage and is not deemed significant. RSG Global also excluded from the resource estimate any 3-metre drill composite that intersected underground workings, further reducing the uncertainty of the void model by excluding this material from the overall tonnages reported;

- the portions of the deposit occurring under old underground workings that represent blocks greater than 30 metres wide and that cannot be drilled from surface are estimated to comprise less than 3 percent of the resource volume. These areas ("shadow zones") all include historic underground drilling data and, should this data not be included in the M&I category calculation, will not constitute a significant exclusion from the M&I resource estimate. It should be noted that current drilling is successfully traversing through voids less than 3 metres wide (mostly old drifts), helping to further reduce any "shadow effect" the historic workings may represent.

The Canadian Malartic gold deposit is being evaluated for large-scale open pit, bulk-tonnage mining potential. A preliminary NI 43-101 compliant, inferred gold resource estimation on the main deposit was released on December 6, 2006 (see company press release).Mr. Robert Wares, P.Geo. and Executive Vice-President of Osisko is the Qualified Person responsible for the technical information reported in this news release.

Contact Information

  • Osisko Exploration Ltd.
    John Burzynski
    Vice-President Corporate Development
    Osisko Exploration Ltd.
    Daniel Boase
    Investor Relations
    416-742-5600 or Toll Free: 1-866-580-8891