Osisko Mining Corporation
TSX : OSK
FRANKFURT : EWX

Osisko Mining Corporation

September 08, 2008 10:23 ET

Osisko Announces Updated Resource Estimate for Canadian Malartic

MONTREAL, QUEBEC--(Marketwire - Sept. 8, 2008) - Osisko Mining Corp. (TSX:OSK)(FRANKFURT:EWX) is pleased to announce the updated National Instrument 43-101 compliant resource estimate for its 100%-owned Canadian Malartic gold deposit, located in the Abitibi region of Quebec, Canada. Micon International Limited of Toronto, Canada ("Micon"), independent resource estimate consultants for Osisko, has authorized the release of these estimates. Based on a lower cut-off grade of 0.36 g/t Au, Micon has estimated a global Measured and Indicated ("M&I") resource of 7.69 million ounces gold with an additional 720,000 ounces in the Inferred category. The tables below summarize results of the estimates using different lower cut-off grades:

Global resource estimates, variable lower cut-off grades



------- ------------------- ------------------- ---------------------
Measured Indicated Total Meas+Ind
------- ------------------- ------------------- ---------------------
Cut-off Tonnes Grade Oz Tonnes Grade Oz Tonnes Grade Oz
(g/t) (M) (g/t) (M) (M) (g/t) (M) (M) (g/t) (M)
--------------------------------------------------------------------------
0.30 4.94 1.25 0.20 263.18 0.93 7.87 268.12 0.94 8.07
--------------------------------------------------------------------------
0.36 4.83 1.27 0.20 227.42 1.02 7.49 232.25 1.03 7.69
--------------------------------------------------------------------------
0.40 4.75 1.28 0.20 208.14 1.08 7.26 212.89 1.09 7.45
--------------------------------------------------------------------------
0.50 4.42 1.34 0.19 170.01 1.23 6.71 174.44 1.23 6.90
--------------------------------------------------------------------------
0.60 4.08 1.41 0.18 141.96 1.36 6.21 146.04 1.36 6.40
--------------------------------------------------------------------------
0.70 3.60 1.51 0.17 121.86 1.48 5.80 125.46 1.48 5.97
--------------------------------------------------------------------------
0.80 3.20 1.61 0.16 106.74 1.58 5.43 109.94 1.58 5.60
--------------------------------------------------------------------------
0.90 2.89 1.69 0.16 94.95 1.67 5.11 97.84 1.67 5.27
--------------------------------------------------------------------------
1.00 2.66 1.75 0.15 85.69 1.75 4.83 88.35 1.75 4.98
--------------------------------------------------------------------------



--------------------------------------------
Inferred
--------------------------------------------
Cut-off (g/t) Tonnes (M) Grade (g/t) Oz (M)
--------------------------------------------
0.30 50.16 0.53 0.85
--------------------------------------------
0.36 37.44 0.60 0.72
--------------------------------------------
0.40 31.14 0.64 0.64
--------------------------------------------
0.50 20.02 0.75 0.48
--------------------------------------------
0.60 12.52 0.87 0.35
--------------------------------------------
0.70 6.99 1.04 0.23
--------------------------------------------
0.80 4.92 1.17 0.18
--------------------------------------------
0.90 3.35 1.32 0.14
--------------------------------------------
1.00 2.49 1.45 0.12
--------------------------------------------


Micon, in collaboration with G Mining Services Inc. of Montreal, also estimated an in-pit M&I resource within a Whittle-optimized pit shell using a base case gold price of US$775 per ounce, details with variable in-pit lower cut-off grades of which are shown in the following tables:

Resource estimates within US$775 Whittle pit shell, variable lower cut-off grades



------- ------------------- ------------------- ----------------- -----
Measured Indicated Total Meas+Ind Strip
Ratio
------- ------------------- ------------------- ----------------- -----
Cut-off Tonnes Grade Oz Tonnes Grade Oz Tonnes Grade Oz Waste/
(g/t) (M) (g/t) (M) (M) (g/t) (M) (M) (g/t) (M) Ore
--------------------------------------------------------------------------
0.30 4.63 1.27 0.19 192.15 1.04 6.43 196.78 1.05 6.62 1.43
--------------------------------------------------------------------------
0.36 4.54 1.29 0.19 173.71 1.12 6.23 178.25 1.12 6.42 1.69
--------------------------------------------------------------------------
0.40 4.47 1.31 0.19 163.38 1.16 6.11 167.85 1.17 6.29 1.85
--------------------------------------------------------------------------
0.50 4.16 1.37 0.18 140.52 1.28 5.78 144.68 1.28 5.96 2.31
--------------------------------------------------------------------------
0.60 3.84 1.44 0.18 120.81 1.40 5.43 124.66 1.40 5.61 2.84
--------------------------------------------------------------------------
0.70 3.40 1.54 0.17 105.96 1.50 5.12 109.36 1.50 5.29 3.38
--------------------------------------------------------------------------
0.80 3.04 1.63 0.16 94.20 1.60 4.84 97.24 1.60 5.00 3.93
--------------------------------------------------------------------------
0.90 2.79 1.70 0.15 84.57 1.68 4.57 87.36 1.68 4.73 4.48
--------------------------------------------------------------------------
1.00 2.58 1.76 0.15 76.95 1.75 4.34 79.52 1.76 4.49 5.02
--------------------------------------------------------------------------



--------------------------------------------
Inferred
--------------------------------------------
Cut-off (g/t) Tonnes (M) Grade (g/t) Oz (M)
--------------------------------------------
0.30 5.80 0.74 0.14
--------------------------------------------
0.36 5.03 0.81 0.13
--------------------------------------------
0.40 4.63 0.84 0.12
--------------------------------------------
0.50 3.70 0.94 0.11
--------------------------------------------
0.60 2.75 1.08 0.10
--------------------------------------------
0.70 1.95 1.26 0.08
--------------------------------------------
0.80 1.60 1.37 0.07
--------------------------------------------
0.90 1.32 1.48 0.06
--------------------------------------------
1.00 1.08 1.59 0.06
--------------------------------------------


Based on an updated ore-based cost of US$6.38 per tonne, the corresponding in-pit cut-off grade for the base case US$775/oz Whittle shell is 0.36 g/t gold, giving an in-pit M&I resource of 6.42 million ounces gold with an undiluted grade of 1.12g/t Au, as shown in the following table:

Distribution of Resource Estimates using base Case US$775 Whittle Pit Shell with a 0.36 g/t Au lower cut-off grade



---------- ---------------------------- ---------------------------
Total Meas+Ind Inferred
---------- ---------------------------- ---------------------------
Tonnes (M) Grade (g/t) Oz (M) Tonnes (M) Grade (g/t) Oz (M)
----------------------------------------------------------------------
Global (OK) 232.25 1.03 7.69 37.44 0.60 0.72
----------------------------------------------------------------------
In-Pit 178.25 1.12 6.42 5.03 0.81 0.13
----------------------------------------------------------------------
Out-of-Pit 54.00 0.73 1.27 32.41 0.57 0.59
----------------------------------------------------------------------


This Whittle pit shell is designed to maximize in-pit cash flow at 5% discount rate. The average gold recovery in this shell is 85.9%. Economic valuation within an optimized engineered pit design will be provided in the definitive feasibility study, which is currently under way and is expected to be tabled in Q4 2008. The out-of-pit M&I resource is estimated at 1.27 million ounces gold, and further pit optimizations using modified variables, such as increased pit slopes or gold price, may allow for eventual inclusion of some of this resource within the pit. Additional drilling is required to upgrade the remaining inferred resources.

Sean Roosen, President of Osisko, commented: "We are very pleased with the new global M&I resource estimate, which has achieved a 91% conversion rate and a 12% average grade increase with respect to last year's inferred resource estimate (286.2 Mt @ 0.92 g/t Au for 8.43 M oz gold). The in-pit M&I resource estimate of 6.42 million ounces is based on updated processing and mining costs that are going to be used in the definitive feasibility study. The focus of the latest work has been to optimize head grade throughput and annual gold output in the early years of mine life. The latest in-pit resource represents an 82% conversion rate and a 33% average undiluted grade increase with respect to the resource tabled in the March 2008 Preliminary Assessment Study (287.7 Mt @ 0.84 g/t Au for 7.79 M oz gold).

These are excellent results as we believe that by immediately incorporating the final feasibility mining and processing costs, this should allow for a very high conversion rate to probable reserves in the upcoming feasibility study. We also plan to carry out additional drilling in the hope of converting the remaining in-pit inferred ounces into the M&I category, and pit optimization studies will also be done in order to establish the viability of bringing in additional M&I resources into the pit shell.

I would also like to note that this resource estimate is limited to the main Canadian Malartic deposit and does not include other mineralized zones currently being drilled, particularly the South Barnat Zone, which offers excellent potential for higher grade material and further economic resource development.

To date, our drill programs have covered less than 5 percent of our property holdings in the Malartic area. We are highly encouraged by our progress at Canadian Malartic and we feel that Osisko shareholders can look forward to a very positive future as the Company continues to explore and develop this exceptional property.

Finally, I would like to thank all employees and consultants involved in the project to date, particularly the staff at Cygnus Consulting Inc. who are managing and executing our exploration and drilling program. The hard work and diligence provided by all were critical in allowing Osisko to achieve this important milestone."

Details on the parameters of the resource estimates are as follows:

- The database comprised a total of 228,800 metres of drilling obtained from historical drilling (Canadian Malartic Mines and Lac Minerals) and from approximately 316,200 metres of drilling completed and assayed by Osisko as of the end of April 2008 on a 30 m x 30 m grid.

- The estimates were done using Ordinary Kriging (OK) as the geostatistical interpolation method. Resources were also estimated using Inverse Distance Squared (ID2) interpolation, which produced similar results, generally two to three percent higher than the OK method, depending on the cut-off used.

- All estimates are based on a Parent Cell dimension of 20 metres E, 10 metres N and 10 metres height with estimation parameters determined by variography.

- Calculations are based on 5 metre composites cut to a maximum of 22 g/t Au in the higher grade domains (greater than 1 g/t Au) and cut to a maximum of 7 g/t Au in the lower grade domains. This resulted in an approximate 1 percent reduction in the overall gold content.

- Testing and validation of cut historical Canadian Malartic (CM) drill data using modern (Osisko) drill data revealed negligible bias in the higher grade domains but significant bias (minimum 25%) in the lower grade domains. CM historical data in lower grade domains were therefore discarded for resource estimate and resource classification purposes. CM historical data were used for resource estimate purposes in the higher grade domains but not retained for measured resource classification. Lac Minerals drill core was mostly re-assayed and these data were retained for resource estimate and resource classification purposes.

- The underground void model was adjusted according to new drill interceptions in stopes and drifts. All assays within 1.0 meter of voids were discarded.

- The US$775 Whittle shell has approximate maximum dimensions of 1925 metres in length, 850 metres in width and a vertical depth of 385 metres.

- Base case pit parameters include a maximum 55 degree inter-ramp angle, total operating expenses (OPEX) of $US10.38 per milled tonne. Calculated preliminary OPEX is $US335.60 per recovered ounce before dilution and royalties.

- Sensitivity of the in-pit M&I resource to gold price is as follows (inferred excluded):



--------------------------------------------------------------------------
Tonnes Grade Oz Lower Cut-off Strip Ratio
Gold Price (US$) (M) (g/t) (M) (g/t) (Waste/Ore)
--------------------------------------------------------------------------
$650 149.05 1.23 5.88 0.42 1.88
--------------------------------------------------------------------------
$775 178.25 1.12 6.42 0.36 1.69
--------------------------------------------------------------------------
$900 214.12 1.02 7.00 0.31 1.64
--------------------------------------------------------------------------
$1000 234.14 0.97 7.27 0.28 1.57
--------------------------------------------------------------------------


Osisko Mining Corp. is currently evaluating the Canadian Malartic gold deposit and adjacent areas for a large-scale open pit, bulk-tonnage mining operation. The Company is well-funded with approximately $155 million on hand and is carrying out an aggressive definition drilling and exploration campaign. The complete National Instrument 43-101 compliant report on this resource estimate will be filed on SEDAR within 45 days of the date of this news release. A NI 43-101 compliant Feasibility Study on the main Canadian Malartic gold deposit is scheduled for release in Q4 2008.

Mr. Terry Hennessey , P. Geo. of Micon International Limited, Mr. Elzear Belzile, P. Eng., Mr. Louis-Pierre Gignac, P. Eng. of G Mining Services Inc., and Mr. Robert Wares, P. Geo. and Executive Vice-President of Osisko, are the Qualified Persons who have reviewed this news release and are responsible for the technical information reported herein.

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 the Canadian Malartic 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 that further work 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
    514-735-7131
    or
    Osisko Mining Corporation
    Daniel Boase
    Investor Relations
    416-742-5600
    Toll Free: 1-866-580-8891
    www.osisko.com