O3 Mining (OIII.V) seems to be very keen on leaving no stone unturned on its Quebec properties as it has added more drill rigs to the ongoing exploration program at Marban, and this brings the total at six active rigs. Two of the rigs will be working on the Malartic property while the remaining four drill rigs will complete the ongoing 100,000 meter drill program at the Alpha zone. In its press release, O3 Mining does a good job providing more details on where the rigs will be deployed.

As a reminder, O3 Mining is planning to complete 145,000 meters of drilling on both Malartic and Alpha. The 45,000 meters at Marban (part of the Malartic property) will be focusing on expanding the currently known resources which contain 1.9 million ounces of gold in the measured and indicated categories and an additional 610,000 ounces in the inferred resources.

And as you can see on the next image, there appears to be plenty of low-hanging fruit where O3 Mining should be able to add ounces to the existing resource.

Increasing the total resource should also help to add more ounces to the mine plan. According to the PEA on Marban, a total of 1.8 million ounces of gold were expected to be recovered, so if O3 could add more ounces to that mine plan, the NPV will likely be positively impacted as the AISC per produced ounce of gold is estimated at US$822/oz. This results in an after-tax NPV5% of C$423M at $1450 gold, and C$846M at $1900 gold.

As of the end of September, O3 Mining had approximately C$60M in working capital on the balance sheet and that’s plenty of fire power to try to add value to the existing project portfolio. Earlier this week, O3 Mining also published the results of a PEA on the Garrison project and using a gold price of $1450/oz, the after-tax IRR comes in at 33% while the NPV5% of C$321M is a good start. The full technical report on the Garrison project should be filed soon and will provide plenty of details for us to dive into.


Disclosure: The author has no position in O3 Mining. Please read our disclaimer.

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