Exploration and development firm Osisko Metals is looking at the former-producing Gaspé Copper, which during its past life was one of the biggest copper operations in eastern Quebec.
Osisko has an exclusive option to acquire 100% of the Gaspé mine from commodities major Glencore for a $25-million up-front payment and a $20-million payment upon start of commercial production.
The company must also incur drilling costs of C$5-million before June 30, 2022, to test oxidation levels within the mineralisation that surrounds the historical Mount Copper openpit deposit.
Osisko notes that there is substantial exploration and resource development potential at Gaspé Copper, which includes the past-producing Mount Copper openpit mine, the higher-grade Needle Mountain and E-Zone underground mines, as well as the undeveloped Porphyry Mountain bulk tonnage deposit.
A drilling programme will start next month with the aim of validating an internal resource model and the oxidation levels of mineralisation at the Mount Copper deposit, which is a critical phase of due diligence on the project that will lead to a decision on whether to exercise the option before June 30.
“Gaspé Copper was a significant copper producer in eastern Canada for over 40 years, and we believe in the potential to unlock value from this asset through drilling and re-evaluation of remaining resources. If our internal model is validated, we expect to close the transaction and release a maiden inferred mineral resource estimate on the Mount Copper deposit this year,” says Osisko chairperson and CEO Robert Wares.
The successful closing of this transaction will give Osisko shareholders significant copper exposure and make Glencore a major shareholder of the company.
“In addition to the ongoing development of our Pine Point zinc/lead project, we are convinced that this combination of projects will cement Osisko Metals’ position as one of the premier base metal development companies in Canada,” he says.
From the initial discoveries in 1921, Gaspé Copper (formerly subsidiary of Noranda) mined the porphyry copper/skarn complex and produced copper concentrate continuously from 1955 until the closure of the mine in 1999.
Production started with the Needle Mountain openpit then expanded to operating the Mount Copper openpit that was supplemented with feed from the extensive high-grade underground skarn mineralization (B and C Zone deposits), as well as the massive sulfide skarn and manto deposits of the underground E Zone.
During its mine life, a total of 150-million tonnes grading an average 0.87% copper with minor gold and silver credits was extracted.