Osisko to develop Windfall without Northern Star

Osisko says that its independent development of the project would be the most beneficial option for its shareholders.

While Northern Star will not be a partner in Windfall, Osisko maintains it will continue a cordial and beneficial relationship with the Australian company, which is an important debt holder having advanced a C$154 million convertible senior unsecured debenture due Dec. 1, 2025, with an interest rate of 4.75% per annum.

In January, Osisko released its latest resource estimate for Windfall gives the project a total of 6.8 million oz. gold. Using a gold cut-off grade of 3.5 g/t, Windfall has 9.5 million measured and indicated tonnes, averaging 10.5 g/t gold (3.2 million oz. of gold) and 5.2 g/t silver (1.6 million oz. of silver). The indicated resource is another 13 million tonnes at 8.6 g/t gold (3.6 million oz. of gold) and 4.7 g/t silver (2 million oz. of silver).

Windfall is the largest high-grade gold project with multi-million-ounce resources, based on the latest resource update.

Since that time, the company continues to drill wide, high-grade intersections. Selected intercepts released last month include 482 g/t gold over 3.7 metres, 380 g/t over 3.2 metres,143 g/t over 3.4 metres, 87.9 g/t over 3.2 metres, and more.

A new high-grade zone has been discovered at the Golden Bear target about 1 km north of the Windfall deposit. Assays included 15.3 g/t gold over 3.5 metres, 6.26 g/t over 2.8 metres, 4.14 g/t over 1.4 metres, 4.15 g/t over 1.2 metres, and 10.5 g/t over 2.4 metres.

Osisko is also conducting an infill drill campaign in the high-grade Lynx zone prior to bulk sampling. Results from this work were released earlier this month. They assayed uncut grades of 696 g/t gold over 43.4 metres, 193 g/t over 2.3 metres, 248 g/t over 2.2 metres, 72 g/t over 5.1 metres, down to 7.04 g/t over 3 metres.

A preliminary economic assessment for Windfall published in April 2021 outlined a 235,000 to 328,000 oz. per year mine with a life of 18 years. Preproduction construction costs would be C$543 million, followed After-tax payback after the start of production would take 2.2 years.

The after-tax net present value with a 5% discount would be C$1.5 billion and the internal rate of return 39.3%. The project could generate gross revenues of C$8.2 billion or operating cash flows of C$2.6 billion over its lifetime. During production, the mine and mill would employ about 400 workers.