Junior sees zinc-lead project in top 10

In 21 months, Osisko Metals Ltd. has boosted the mineral resource estimate for its Pine Point zinc-lead project near Hay River in Northwest Territories by 36 percent to 50 million metric tons, a critical milestone for base metal mining ventures.

The Montreal-based junior is also generating new excitement about the brownfields project by reporting more high-grade assays and additional evidence of upside mineral potential on the 22,213-hectare (8,990 acres) property located south of Great Slave Lake.

Osisko Metals is now working to elevate the project's inferred resources into the "indicated" category with an ongoing re-evaluation of historical assays completed at Pine Point and to complete a preliminary economic assessment of the project in the second quarter of 2020.

"Global zinc and lead projects with all supportive infrastructure and more than 50 (million metric tons) in near-surface resources are extremely rare, and we are delighted that Pine Point now enters this select group," said Jeff Hussey, P.Geo., president and CEO of Osisko Metals, announcing the updated resource estimate last month. "There is a depleted pipeline of quality zinc development projects globally, and we believe Pine Point will place Osisko Metals at the forefront of junior base metals exploration and development companies.

"Having achieved our objective of increasing the resource base to the 50Mt threshold, we now believe that the project could develop into a mine large enough to enter the top 10 global zinc mines on an annual zinc-in-concentrate basis. We would also emphasize that exploration at Pine Point has been minimal in the last 30 years, we believe there is more to come for the project," Hussey added.

Pine Point is a rare, large-tonnage, high-grade open pit project among its zinc development peers.

Moreover, metallurgical test work completed to date continues to highlight Pine Point as potentially producing among the cleanest high-grade zinc and lead concentrates globally, which could significantly lower their refining costs.

A productive history

Though discovered by prospectors during the Klondike Gold Rush in 1898, the Pine Point lead-zinc project did not receive significant attention until 1929, when Cominco Ltd. acquired the property and launched on and off exploration programs until the early 1960s. The miner then advanced the project to construction, which included a railroad, hydro-electric dam and a town where up to 2000 people could live.

In 1964, Cominco began large-scale mine production at Pine Point, eventually ramping up production to a rate of 10,000 tons per day from 50 separate open pits and two underground deposits lying along a 60-kilometer (39 miles) trend. During the next 23 years, Cominco mined a total of 64 million metric tons, grading 7.0 percent zinc and 3.1 percent lead before closing the mine in 1987. In all, Cominco discovered about 90 deposits at Pine Point, while a subsequent explorer, Westmin Resources Ltd., found several more deposits west of the Buffalo River. In all, historic drilling on the property totaled roughly 1.3 million meters in 18,422 holes by Cominco, Westmin and Tamerlane Ventures Inc.

New 2019 MRE

Osisko Metals acquired the project in February 2018 and in December 2018, reported a pit-constrained inferred mineral resource estimate for Pine Point of 38.4 million metric tons grading 4.58 percent zinc and 1.85 percent lead, or 6.58 percent zinc-equivalent, and containing about 3.9 billion pounds zinc and 1.6 billion lbs. lead.

The updated mineral resource estimate for Pine Point reported Nov. 13 totals 52.4 million metric tons averaging 4.64 percent zinc and 1.83 percent lead, or 6.47 percent zinc equivalent, and containing some 5.3 billion pounds of zinc and 2.1 billion pounds of lead in-situ.

Osisko Metals attributed the increase to results of its 2018-2019 drilling campaign, historical resources on newly acquired claims and the inclusion of newly modeled underground resources totaling 4.5 million metric tons grading 5.76 percent zinc and 2.43 percent lead, or 8.19 percent zinc-equivalent with a cutoff of 5 percent. The central core of the project (East Mill, Central and North Zones) now contains roughly 31.9 million metric tons grading 6.22 percent zinc-equivalent, or 3.1 billion pounds of zinc and 1.1 billion pounds of lead in situ.

Ambitious exploration plans

Pine Point's drill hole database includes 18,542 holes and 318 Osisko Metals definition drill holes. The junior intends to add some 400 additional definition holes to the database to help upgrade resources to the indicated category.

In August, Osisko Metals launched a fall exploration program at Pine Point, including a 5,000-meter drill program.

"Following extensive compilation work and advanced geological modeling, our exploration team has a better understanding of the structural controls associated to the distribution of lead-zinc mineralization in the 60-kilometer-long system. We have identified several high-priority targets that were not explored by previous operators," Hussey said of the fall program.

"The exploration upside is quite substantial across the entire property. We strongly believe there remains multiple opportunities to significantly increase the resource base beyond our current mineral resource estimate," he added

The new targets included more than 100 drill holes with significant mineralization located outside of the current resource model and not pursued by previous operators.

Osisko Metals believes the property also hosts potential for mineralization in the deeper underlying Pine Point Formation (about 50-70 meters thick), which has seen less historical exploration. Analysis of its new drill-hole database and resultant 3D modeling shows dolomite alteration, sulfide development and controlling structures to be present in this poorly explored formation that hosted the large, and previously mined X-15 deposit.

The company also plans to drill priority gravity anomalies along favorable structural trends that could lead to the discovery of additional near-surface higher grade prismatic deposits.

Osisko Metals said it used a LiDAR high-resolution topographic survey flown in 2018 in an innovative approach to highlight structural controls and subtle circular collapse breccia structures associated with prismatic deposits.

The resulting three sets of targets are the culmination of the geological compilation work covering the central 25 kilometers (16 miles) of the property (East Mill, Central, and North Trend Zones). The key characteristics underlying the targeting vectors for prismatic deposits are their higher grade and more vertically continuous shape occurring as breccia pipes associated with regional and secondary faults, compared to horizontal, tabular deposits that are controlled by the more permeable geological formations.

In mid-November, the junior began drilling some 60 initial prismatic-style targets distributed both within and between mineralized trends with many occurring in very sparsely drilled areas within the East Mill, Central and North Zone.

"The start of this phase of the exploration campaign marks an exciting time for Osisko Metals as we leverage tools never available to previous operators to potentially make new discoveries," Hussey explained.

Development underway

Hussey said the company is also beginning to assemble a team to de-risk and advance the project through development and permitting concurrent with project-wide exploration. Internal scoping studies are underway in preparation for a NI 43-101 preliminary economic assessment planned for completion by mid-2020 to demonstrate the potential for a global top 10 zinc mine at Pine Pont.

The company is collaborating with Golder Associates Ltd. to assist and support its work during the environmental assessment process. Baselines studies underway in the second half of 2019 will continue to completion in 2020. Aurora Geosciences Ltd. is managing the junior's exploration camp and program logistics and supporting Golder in the field.

Recent drill results

Osisko Metals posted new assay results Dec. 9 from recently completed nine exploration drill holes in the East Mill Zone (L37 deposit) at Pine Point. Eight of the nine intersections reported were drilled outside the project's current mineral resource boundary at L37. All of the intersections are located between 16 to 45 meters vertical depth.

Highlights include drill hole L37-19-PP-028 that intersected 9.46 percent zinc and 0.79 percent lead over 11.85 meters and drill hole L37-19-PP-035 that intersected 14.83 percent zinc and 4.45 percent lead over 4.68 meters.

"A substantial portion of our newly published 52.4Mt inferred mineral resource estimate was dependent on Cominco Ltd.'s drilling. As Cominco Ltd. had different exploration objectives, many of the deposits outlined in our MRE remain open in all directions," said Hussey. "These results demonstrate the upside potential of Pine Point, not just in identifying new exploration targets but also in expanding known mineralization across the project area. With the forthcoming transition toward drilling untested gravity targets on the property over the coming days, we believe the best is yet to come for Pine Point."

The reported results reflect exploration efforts to connect areas of inferred mineral resources. Drilling is ongoing and expected to continue during the first quarter of 2020, with the focus shifting to the newly identified prismatic targets that can be associated with tabular channels.

Osisko Metals believes these channels, as well as vertical geological structures, are two controlling factors of prismatic deposit development that wasn't realized in the past.

Other matters

In recent weeks, Osisko Metals completed several transactions that cut in half a 3 percent net smelter return royalty on the Pine Point project and raised funds for future exploration on the property.

Osisko Metals Gold Royalties and Osisko Mining Corp. together hold the largest ownership stake in Osisko Metals with 19.1 percent of the junior's shares.