Osisko Metals Inc. [OM-TSXV; OMZNF-OTCQX; 0B51-FSE] reported results of an independent Preliminary Economic Assessment (PEA) including the results of an updated Mineral Resource Estimate that converts approximately 25.5% of the global resource to the Indicated Mineral Resource category for its wholly-owned Pine Point Project, located near the town of Hay River in the Northwest Territories, Canada.
The PEA was prepared in collaboration with independent engineering firms BBA Inc., WSP Canada Inc., and Tetra Tech.
PEA Highlight Results (all figures in CAN$ unless otherwise noted)
| After-Tax Internal Rate of Return (IRR) | 29.6% |
| After-Tax Net Present Value (NPV) (Discount Rate 8%) | $500M |
| After-Tax Payback Period (Years) | 2.8 |
| Pre-Production CAPEX (including $71.2M Contingency) | $555M |
| Average Annual LOM Production Zinc | 327Mlb |
| Average Annual LOM Production Lead | 143Mlb |
| Life of Mine (LOM) | 10 Years |
| Total Mineral Resources Mined | 39.1Mt |
| Average ZnEq Diluted (12%) Grade of Mineral Resources Mined | 6.17% |
| Gross Revenue After Royalty (LOM) | $4,371M |
| After-tax Operating Cash Flow (LOM) | $1,064M |
| C1 Costs over LOM (ZnEq)* | US$0.67/lb |
| Estimated All-In Costs (Total CAPEX plus OPEX, ZnEq)** | US$0.82/lb |
| LOM Zinc Price | US$1.15/lb |
| LOM Lead Price | US$0.95/lb |
| FX Rate (CAD:USD) | 1.31 |
| *C1 cost is mine site cost plus smelting, transport and royalty | |
| **All-in costs are C1 plus sustaining CAPEX | |
Robert Wares, Executive Chairman & CEO, commented: “I am very pleased with the PEA study showing an impressive after-tax IRR of 29.6% and after-tax NPV of C$500 M. The proposed mine plan would produce over 450Mlb of zinc in its peak year and an annual average of nearly 330Mlb of zinc and 145Mlb of lead over its estimated 10-year mine life. On a zinc-only basis, Pine Point could potentially, if it entered into production, become a low-cost zinc-lead producer ranking fourth largest in the Americas and ninth in the world, yielding an exceptionally clean and high-grade zinc concentrate.”
Robert Wares continued: “Furthermore, the concurrent release of an updated 2020 Mineral Resource Estimate for Pine Point demonstrates that continued drilling will improve the classification of the resources and potentially yield further expansion of known deposits. With several deposits open, I am particularly excited to continue exploring and expanding the resource base across the project. We strongly believe in the Pine Point Project and Osisko Metals will continue developing this asset within the context of improving global zinc markets.”
Jeff Hussey, President and COO, added: “The current PEA concept is a large scale operation (11,250 tonnes per day), where the mineral resource mined would be sourced mainly from small, near-surface open pits with additional contributions from eight high-grade, shallow deposits mined by underground methods from the West and Central Zones. The PEA considers historical data from the Cominco Ltd. era and incorporates significant technological improvements in the mining industry since the closure of the Pine Point operation in 1988. While the PEA already outlines a base-case for a potential top-ten zinc producer of high-quality clean concentrate, we foresee several areas for improvement as we continue to optimize these great initial economic metrics and move towards initiating a feasibility study.”