TORONTO (miningweekly.com) – Montreal-based Osisko Mining has completed an updated resource estimate for the South Barnat gold deposit, on the company's Canadian Malartic property in Quebec.

South Barnat is a separate gold deposit located adjacent to the Malartic deposit, which currently hosts a 6,28-million ounce gold reserve.

Based on a cut-off grade of 1 g/t of gold, the global measured and indicated (M&I) resource at South Barnat stands at 1,94-million ounces of gold at an average grade of 2,09 g/t, with an additional 100 000 oz, at an average grade of 1,86 g/t, in the inferred category.

However, at a lower cut-off grade of 0,36 g/t, the global M&I resource is 2,24-million ounces of gold at an average grade of 1,64 g/t, plus 120 000 oz at an average grade of 1,40 g/t in the inferred category.

The company has also completed an estimated inpit M&I resource for South Barnat, within a Whittle-optimised pit shell, using a base case gold price of $775/oz.

Based on a cutoff grade of 1 g/t, the in-pit M&I resource is 1,81-million ounces of gold at an average grade of 2,12 g/t, with an additional 50 000 ounces gold at an average grade of 1,87 g/t in the inferred category.

Economic valuation within an optimised engineered pit design will be provided in an updated reserve statement for the entire project by year end, which will optimise the combined Canadian Malartic and South Barnat pits, Osisko said on Tuesday.

"The new in-pit combined M&I resource estimate of 8,43-million ounces is based on processing and mining costs that were used in the feasibility study, and we anticipate that over 95% of this resource is going to be converted into reserves for the entire project, once a new reserve estimate is calculated,” said president Sean Roosen.

“It is worth noting that even at a cut-off of 1 g/t, we are now looking at a project total in-pit M&I of 6,3-million ounces of gold at an average grade of 1,85 g/t, which makes this resource very robust at significantly lower gold prices.”

If the company is able to successfully prove up economic reserves at South Barnat, the firm will then ensure it has the necessary authorisations to mine the South Barnat deposit and integrate it to the Canadian Malartic project.

Osisko will also begin a study, in cooperation with the Quebec Ministry of Transport and the town of Malartic, to evaluate the deviation of highway 117 that would be required for potential mining of the South Barnat deposit.

The out-of-pit M&I resource is currently estimated at 1.47 million ounces gold, and further pit optimisations using modified variables, such as increased pit slopes or gold price, may allow for eventual inclusion of some of this resource within the pit, the firm added.

Additional drilling is required to upgrade the remaining inferred resources.

“We are currently carrying out additional drilling north of Barnat and in the south-east extension of the Canadian Malartic deposit in order to further expand the overall resource, which will be incorporated into an updated project resource statement, including combined optimised pits, to be released in the second half of 2009," Roosen said.

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