Osisko provides early update on Q3 operating results and ramp up at Canadian Malartic
MONTRÉAL, QUÉBEC--(Marketwire - Oct. 19, 2011) - Osisko Mining Corporation ("Osisko" or the "Company") (TSX:OSK)(FRANKFURT:EWX) was advised by Investment Industry Regulatory Organization of Canada on behalf of the Toronto stock exchange that its stock was halted based on recent trading activity. Osisko is not aware of any corporate developments to account for this activity.
At Canadian Malartic, grade reconciliation to the block model is currently plus 3 percent as indicated by nearly one million metres of drilling and conformable to the feasibility study block model. Recoveries to date are currently at 88 percent – over 2 percentage points better than originally modelled. A total of 16 Caterpillar 793 trucks have been assembled and are operational on site, two RH340 pit shovels, one Letourneau L1850 loader and one 994 Cat loader have been assembled and are operational, as well as 4 Pit Viper drills and 5 Cubex drills. Open pit operations mined on average 130,000 tonnes per day during the Q3 period (stripping, ore and waste), throughput to the mill averaged 36,750 tonnes per operating day in Q3, 67% of design capacity on a per operating day basis, after only 135 days following the declaration of the first day of commercial production. The first of two cone crushers (of the pre-crush circuit) arrived on site in August and is being assembled. Construction progress for the pre-crush building is 30 percent complete to date, with final installation and commissioning scheduled for Q1 2012. The second cone crusher is scheduled to arrive in early Q2 2012. Operations at the mine have been running 24 hours per day 7 days per week since April 2011. The noise mitigation program was completed in the early spring of this year and the Company continues to monitor its compliance in connection therewith. Overburden and pit development operations will continue into 2012. Overall availability of all trucks and loading units are above 85 percent and drills are at 80 percent. Operational efficiencies are improving steadily. Abrasion and wear on truck tires appears to be significantly less than projected in the feasibility study (5900 hours current vs. 3500 hours budgeted in feasibility).
Grade control and reconciliation continue to progress, blast hole and blast-design continue to improve. Mining operations continue to evolve and production increases continue. Given the evolution of the pit development during the summer, the revised and optimised mine schedule will be made available within the coming weeks to take advantage of the introduction of the pre-crush unit in Q1 and the added mine fleet capacity that will be achieved by Q1 next year. Current guidance is that ounces produced from the date of declaration of commercial production up to the end of 2012 will be plus or minus 10% of one million ounces.
Tonnes milled during Q3 were 3,086,000 at an average grade of 0.85 g/t, with recovery of 87 percent for a gold output of 73,814 ounces. Daily throughput in the quarter was affected by two shut-downs for liner changes in the SAG mill.
Mining in higher grade areas will continue to progress in Q4 2011 and Q1 2012 as pre-strip operations open up new areas to pit development. Further test work is under way regarding crushing and grinding optimisation and Osisko has completed engineering work as per guidance in August that the pre-crush circuit will be key for the ramp up from 55,000 to 60,000 tonnes per day. Osisko is working steadily towards achieving design capacity of the mill upon completion of the pre-crush circuit.
President and CEO Sean Roosen commented: "Canadian Malartic continues to be a fast-track project. Construction of the mill was completed 3 months ahead of schedule, and now only 135 days after the declaration of commercial production we are already at 67 percent of design capacity and have set the course for the achievement of full ramp up and the completion of the pre-crush circuit early next year, bringing throughput from 55,000 tpd to 60,000 tpd which will be 109 percent of initial design capacity. To have a world class project of this size and scale executed with such speed in this very competitive market is an extraordinary achievement by the employees of Osisko. We look forward to 2012 being our first full year of production and establishing our position in the mid-tier producer pack."
Feasibility was carried out in 2008 at an assumed gold price of $775 per ounce. Canadian Malartic is now an operating mine with gold price of well over $1,600 per ounce, presenting significantly increased margins from initial feasibility.
Aggressive drilling with 18 drill rigs continues at Hammond Reef. Since the acquisition of the project in 2010, Osisko has executed over 388,000 metres of HQ and NQ core drilling, in addition to the pre-existing 48,000 metres executed by Brett, for a total of 436,000 metres. The inferred resource update is expected to be completed and released within the coming weeks.
Osisko Mining Corporation, based in Montreal, Que., is a company focused on acquiring, exploring, developing and mining gold properties, with the aim of becoming a mid-tier gold producer. Its flagship project is the Canadian Malartic gold mine in the Abitibi mining district, which represents the single biggest gold reserve in production in Canada with proven and probable reserves of 10.7 million ounces of gold. Osisko is included on the S&P/TSX Composite Index, the leading indicator of market performance based on Canada's major corporations.
Forward Looking Statements
Certain statements contained in this press release may be deemed "forward-looking statements". All statements in this release, other than statements of historical fact, that address events or developments that the Corporation expects to occur, are forward looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential", "scheduled" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur including, without limitation, increasing of throughput at the mill to achieve design capacity, timely installation of the pre-crush circuit, compliance with noise regulations, increasing of mining fleet availability, increasing of production. Although the Corporation believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, including, without limitation that the diligent ongoing optimizing of its operations will be achieved and will, accordingly, improve its operating performance, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include gold prices, the Corporation's limited experience with production and development stage mining operations, uninsured risks, regulatory changes or sanctions, defects in titles, availability of personnel, materials and equipment, timeliness of government approvals, actual performance of facilities, equipment and processes relative to specifications and expectations, unanticipated environmental impacts on operations costs, continued availability of capital and financing and general economic, market or business conditions. These factors are discussed in greater detail in the Corporation's most recent Annual Information Form filed on SEDAR, which also provides additional general assumptions in connection with these statements. The Corporation cautions that the foregoing list of important factors is not exhaustive. Investors and others who base themselves on the Corporation's forward-looking statements should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. The Corporation believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release.