More positives from Osisko: Drill results, annual report, outlook

Hammond Reef is now one of the largest drilling projects in Canada with 18 drill rigs coring into the rock, 30 km north of town. Osisko announced some results from its 119,000 metre fall 2010 drilling program, which to date, continue to demonstrate consistent and significant gold values in and around the deposit.

Current drill intersection highlights from 41 of 324 holes drilled in the fall include 124 metres averaging 0.73 grams per tonne, 60 m @ 0.74g/t, 45 m @ 1.86 g/t and 49.5 m averaging 1.83 g/t.

These recent results come from drilling to define the known gold resource and some exploration and step-out drilling within the immediate area of the deposit. Test work was conducted the southeast extension ofthe Mitta Zone area (in the central portion of the gold deposit), andalso in the westerly part of the 41 zone.

All of the 41 holes but the five (88%) drilled in the southeast extremity of the deposit intersected significant mineralization, noted the company.

Step-out results, combined with previous drilling, confirm the extension of the mineralization over an approximate 500 metre strike length. Definition drilling occurred in a 50 by 205 metre grid along 2.65 kilometres of the deposit, with the resource still being expanded along strike and down dip (parallel to, or in the general direction of,the dip of the gold deposit).

While over 176, 000 metres were drilled in all of last year, the company has planned an aggressive advanced exploration program to drill 250,000 metres to upgrade and expand its gold resources. The company will spend in the neighbourhood of $60 million on Hammond Reef this year.

The deposit sits along a splay of the fertile Finlayson Fault Zone,on a property that now encompasses over 30,000 hectares, as a result of last year’s land acquisitions (including the Sparton Resources property).

Last week, Osisko Mining Corp. (of which Osisko Hammond ReefGold—formerly Brett Resources—is a wholly-owned subsidiary) highlight edits 2010 accomplishments in its year-end report, including the 90%completion of its Canadian Malartic gold mine and the acquisition of Brett and Hammond Reef which now puts the Montreal-based company closer to its goal to become “a leading intermediate producer,” president and CEO Sean Roosen noted in the report.

Last year the company spent just over $484 million on construction ofthe Malartic Mine, for a total outlay of $888 million to date. An additional $30 million is committed to the mine which is scheduled to begin production this May. In total, the company drilled 409, 200 metres on its Hammond Reef and Quebec properties; secured $92 million in financing; completed a shareholder rights plan to help prevent a hostile company takeover; signed a resource-sharing agreement with eight First Nations in proximity to the Hammond Reef; and completed its relocation of over 100 homes to make way for the Malartic mine. The relocation has included building a school, seniors’ complex, recreation facility, and a green “wall” to mitigate the impact of the mining activities on the adjacent community.

Year-end financial results show a smaller net loss of $19.5 million for the company than compared to 2009's $20.8 million loss. The company notes that higher administrative costs reflecting the growth in the company’s activities, and higher charges for the issuance of stock options in the third quarter of 2010 were “more than offset” by positives such as the strengthening Canadian dollar, higher interest income and higher unrealized gains on certain assets held for trading.

In the fourth quarter of last year, the company incurred a $1.2million loss (with no loss to shareholders), a marked improvement from the same quarter in 2009 where it incurred a loss of $8.4 million—and a three cent loss to shares.

With the Brett acquisition, Osisko’s total assets have grown to over $2 billion this year (from nearly $1.4 billion in 2009) and shareholders’ equity has increased to nearly a half a billion dollars,up from $1.1 billion the year before. The company spent half of its Malartic mine construction spending in 2010, and ended the year with a $287.9 million total debt–up from 2009's $180 million debt. The company also used much more of its working capital this past year; at year’s end it sat at just over $283 million, whereas it had over $760 million banked in the previous year. The company reports almost $400 million in cash on hand.

http://www.atikokanprogress.ca/2011/03/14/more-positives-from-osisko-drill-results-annual-report-outlook