TORONTO (miningweekly.com) – Montreal-based Osisko Mining on Wednesday unveiled an enlarged nine-million-ounce gold reserve estimate for its Malartic openpit project, in Quebec, with the news that it is studying an increase in throughput just three years after mining starts at the operation.
The openpit reserve, which includes the Canadian Malartic and South Barnat deposits, of 8,97-million ounces of gold, at an average fully diluted grade of 1,13 g/t, represents an increase of 43% compared with the feasibility numbers put out in November 2008.
The company, which plans to build Canada's largest openpit gold mine at Malartic, has also achieved an impressive 98% conversion rate on the new 9,17-million ounce in-pit measured and indicated resources (at $825/oz gold) announced in December last year.
With the new reserve estimate, the mine life at the Malartic project has jumped 25%, to 12,2 years, based on the 55 000 t/d milling rate envisaged in the feasibility study.
Based on current plans, the mine would produce an average of 630 000 oz/y of gold and 800 000 oz/y of silver, although output in the first three full years of production would be higher, at at average of 690 000 gold ounces.
However, Osisko announced on Wednesday that it is considering a ramp up in the milling throughput rate to 60 000 t/d in the third year of operations (2013), which would result in average production of 700 000 oz/y over the first five years.
“It's a little bit better than what we had actually hoped for going into this,” CEO Sean Roosen commented on Wednesday.
The company had previously speculated it could get up to those levels for just two or three years with the addition of ore from the South Barnat resource, he said.
“But it looks like five years at 700 000 oz is quite do-able with a small increase in throughput at the mill”
Osisko expects the capital needed to achieve the increased mill rate would be “modest”.
First production at the mine is targeted for 2011 and construction at the project site is proceeding well and on schedule, especially after a relatively mild January, Roosen said.
The company plans to publish updated operating cost forecasts and a new capital cost estimate that includes plans to develop the South Barnat deposit, which was not included in the feasibility study, in the second quarter of this year.
There has been an increase in the Canadian-US dollar exchange rate and the feasibility numbers were based on third-quarter 2008 input costs, which were “quite high”, Roosen commented.
Operating costs could also be improved by increases to the average grade in the new reserve estimate.
Overall, he expects the revised cash cost estimates should be within about 5% of the feasibility study numbers, Roosen said.
Osisko currently only has permits to mine the Canadian Malartic deposit and will need to secure a mining permit as well as permission to deviate a highway before it can start mining the South Barnat portion of the deposit, which is currently planned for 2012.
Edited by: Liezel Hill
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