Drills confirming zinc at Pine Point

Osisko Metals Inc. May 8 said its winter drilling continues to confirm historical zinc mineralization at its newly acquired Pine Point zinc-lead project in Northwest Territories.

Located near the community of Hay River, the Pine Point project benefits from substantial infrastructure that includes road access, rail head in Hay River and hydro-electric power available on site.

A preliminary economic assessment completed in 2015 examined several development scenarios and settled on a mining plan where 10 open-pit deposits are mined in sequence.

The deposits included in the mine plan host 25.8 million metric tons of measured and indicated resources averaging 2.9 percent zinc and 1.1 percent lead, plus 3.7 million metric tons of inferred resources averaging 2.9 percent zinc and 0.8 percent lead.

Roughly 4,000 to 6,800 metric tons of mineralized material would be mined per day and fed into dense media separation plants for pre-concentration prior to being trucked to a centralized 1,800-metric-ton-per-day mill to produce lead and zinc concentrates with a more traditional mining and flotation circuit. The concentrate will then be trucked about 65 kilometers (40 miles) to a railway facility at Hay River. This method is similar to that used by Cominco (now Teck Resources) when it operated a mine at Pine Point from 1964 to 1987.

The mine outlined in the PEA is expected to produce 1.35 billion pounds of zinc and 536 million lb lead over a 13-year mine life.

Immediately upon the February closing of a deal to acquire Pine Point, Osisko Metals launched a 50,000-meter drill program aimed at converting 50 million metric tons of historical near-surface resource to modern (NI 43-101) reporting standards.

"We are planning an aggressive exploration program to confirm, upgrade and expand the portfolio of over 40 historical deposits," said Osisko Metals President and CEO Jeff Hussey. "Shallow mineralization will allow us to rapidly convert the historical resources into NI 43-101-compliant mineral resource estimates and incorporate them into economic studies."

The winter portion of this program, which wrapped up at the end of April, included 7,860 meters of drilling in 129 holes.

This drilling tested East Mill Zone, a 5,000-meter-long trend of historical deposits previously known as the Cluster 1, and Central Zone, a 7,600-meter-long trend to the southwest of the East Mill Zone

These zones are part of the Main Trend, one of three parallel trends of zinc mineralization at Pine Point.

So far, Osisko has reported results from 43 of the shallow holes drilled this winter.

Highlights include 5.53 meters of 10.8 percent zinc and 0.7 percent lead in hole EM-18-PP-015, and 10.3 meter of 4.86 percent zinc and 0.61 percent lead in EM-18-PP-016 at the L36 deposit; and 8.25 meters of 7.05 percent zinc and 1.4 percent lead in the L27 deposits.

Both in East Mill Zone, the L27 and L36 deposits are about 3,800 meters apart.

"These latest results strengthen our confidence in historically reported mineralization. If we can demonstrate continuous grades over reasonable widths along the entire East Mill Zone, we will effectively be able to connect a chain of individual historical near surface deposits into a continuous belt of potentially economic material," said Hussey. "This entire belt could theoretically be mined by shallow open pit methods."

Osisko Metals plans to resume the 50,000-meter drill program after the spring thaw.

–SHANE LASLEY