Osisko Metals has launched a fall exploration drilling program at Pine Point.
As opposed to the drilling last year and into early 2019, the new drilling is aiming to grow the resource base rather than define what was already known to be at Pine Point from the Cominco mining operation that closed in 1988.
“We are excited to initiate our exploration program focused on new near-surface lead-zinc targets at Pine Point,” said Jeff Hussey, president and CEO of Montreal-based Osisko Metals, in an Aug. 27 news release.
“Following extensive compilation work and advanced geological modelling, our exploration team has a better understanding of the structural controls associated to the distribution of lead-zinc mineralization in the 60-kilometre-long system. We have identified several high-priority targets that were not explored by previous operators.”
Hussey added that Osisko Metals strongly believes there are multiple opportunities to significantly increase the resource base beyond the current mineral resource estimate of 38.4 million tonnes.
The inferred mineral resource is grading 4.58 per cent zinc and 1.85 per cent lead, which makes Pine Point the largest high grade, pit-constrained zinc deposit in Canada.
The new exploration program started in late August.
When contacted by The Hub, Hussey said the drilling will go through the winter.
“We are starting with one drill,” he said. “We are also at the same time re-logging old core from the Cominco era that are on site. We’ve located all of our work at the minesite. So we had a core shed in Hay River, but now it’s at site.”
One drill rig means five or six workers on site.
Hussey said the extent of the drilling over the winter will depend on the results and market conditions, but it will not be an eight-drill program like last winter.
“So as other tasks end, we may ramp up, we may not, but we’ve started exploring again,” he said. “The difference this year is that it is an exploration program to grow the resource base further. It is not a definition drilling program as last year to prove up the historical tonnage that was there.”
Last year’s drilling continued into February of 2019.
“And due to market conditions we decided to shut the program down,” said Hussey.
Until the new program began, there had been no drilling since February, in what Hussey previously described as a pause caused by difficult market conditions partly resulting from the ongoing trade dispute between the United States and China.
“So we started up this summer slowly getting ready for this drill program, starting to look at some of that historical core on site,” he said.
Earlier this summer, Osisko Metals announced that it had raised $10 million.
“So that shows that we have the ability to raise money in difficult times, but I would much rather raise it in better market conditions where the share price is higher,” said Hussey. “So the uncertainty is still there.”
People are holding back on building infrastructure and spending money, he explained. “Once that uncertainty subsides, we may see in the States they may start spending on infrastructure or stimulus infrastructure projects. The same in China. But right now they are not. So the demand for base metals is less and the price is lower.”
Hussey cautioned that the Pine Point project is still in its early stages.
Osisko Metals is aiming to produce a preliminary economic study in the first quarter of 2020, he said. “We will reassess the project at that point in time.”