Osisko Metals’ Gaspe at 824 Mt of 0.34% CuEq indicated

Nov 15, 2024

2024-11-14 14:15 ET – News Release

Mr. Robert Wares reports

OSISKO METALS ANNOUNCES SIGNIFICANT INCREASE IN MINERAL RESOURCES AT GASPE COPPER

Osisko Metals Inc. has released an updated mineral resource estimate (MRE) for the Gaspe copper project, located near Murdochville in the Gaspe peninsula of Quebec. The updated MRE (see attacged table) includes pit-constrained resources comprising 824 million tonnes grading 0.34 per cent copper equivalent in the indicated category and 670 million tonnes grading 0.38 per cent copper equivalent in the Inferred category. This MRE represents a 53-per-cent increase in copper equivalent metal content over the previously reported indicated resource and a 100-fold increase in copper-equivalent metal content in inferred resources (see May 6, 2024, news release).

At 4.91 billion pounds (2.23 million tonnes) of contained copper (see attached table) as well as significant molybdenum (274 million pounds) and silver (46.0 million ounces), the latest Gaspe copper in-pit indicated resource hosts by far the largest undeveloped copper-molybdenum deposit in eastern North America, exclusive of inferred resources.

Robert Wares, chief executive officer and chairman, commented: “We are very proud to announce this updated resource estimate for Gaspe copper. The overall resource has increased dramatically since last spring’s MRE as a result of new geological modelling and extending the modelled Whittle pit boundaries towards Needle Mountain to the south. A minimum 70,000-metre drill program is now planned for 2025, with the objective of converting the bulk of the current inferred resource to indicated category. There is also excellent potential for converting currently categorized in-pit waste rock to mineralized material with this drill program, which would further grow the in-pit resource while reducing the strip ratio. This MRE represents a much larger resource than was estimated previously, presenting the potential for a bulk-tonnage mining operation with significantly higher throughput. Given this new resource milestone, management has elected to defer the PEA, originally slated for release in Q1 2025, to a later date until additional new drilling is completed. Continuing studies will focus on a larger-scale mine plan and relocation of the mill complex away from the current site.”

Mr. Wares continued: “We are proud to be leading the Gaspe copper project, which is shaping up to be a major Canadian copper-molybdenum development project located in one of the world’s safest mining jurisdictions. This important asset has the potential to become a core component of Quebec’s critical mineral development strategy that aims to provide essential metals for global decarbonization initiatives.”

This significantly larger resource estimate is the result of:

Geological reinterpretation of the mineralized system, whereby most of the mineralized stratigraphic units above the base of the C-zone skarn, including up-dip extensions toward Needle Mountain, were included in the resource model;
Extension of the Whittle pit model to the south toward Needle Mountain, eliminating the possibility of a potential mill complex on the site of the original Gaspe copper mill; two other sites for the potential mill are now under consideration;
Lowering of cut-off grade from 0.15 per cent copper to 0.12 per cent copper on the basis of potentially larger mine throughput and replacement of SAG (semi-autogenous grinding) mill by HPGR (high-pressure grinding rolls) in the grinding circuit.

Potential for resource expansion

Building upon the information released in this updated MRE, a minimum 70,000-metre drill program is planned to commence in May, 2025, that will aim to: (1) convert inferred resources to indicated category by reducing drill spacing to 100 metres or less within the pit volume; (2) better define higher-grade (0.5 per cent to 1.5 per cent per cent copper) mineralization within pit boundaries in the B-zone and C-zone skarn horizons; (3) extend up-dip, shallower B-zone and C-zone skarn mineralization (near Needle Mountain) beyond current pit boundaries; and (4) test shallower (above 600-metre depth) portions of the high-grade (2 per cent to 3 per cent Cu) E-zone skarn for inclusion into the pit volume.

Implications of larger open-pit resource at Gaspe

The current modelled Whittle pit shell extends from the current flooded Copper Mountain pit toward the base of Needle Mountain to the south. Further drilling, geological modelling and pit optimization will be required to refine pit boundaries. The company will evaluate future pit limits and the possibility of reconfiguring the current layout of the site to minimize disturbance and ensure the protection and safety of the residents of Murdochville and the surrounding environment.

General parameters of the updated mineral resource estimate

This MRE is pit constrained and includes stockwork mineralization surrounding the past-producing Copper Mountain open-pit mine as well as disseminated, stratiform mineralization in both skarn and potassic-altered hornfels (porcellanite) that extend up dip from Copper Mountain toward Needle Mountain to the south.

The MRE uses, amongst other parameters, a long-term price of $4 (U.S.) per pound copper, a lower cut-off of 0.12 per cent copper for pit shell modelling and a lower cut-off grade of 0.12 per cent copper for base-case in-pit resource estimation. The resource was estimated using data from historical drilling completed between the 1950s and 2019 and 42,100 metres of drilling completed by the company between 2022 and 2024 (see appendix for detailed parameters).

Mineral resource sensitivity

An attached table shows the resources reported at various in-pit cut-off grades within a pit shell modelled at a lower cut off of 0.12 per cent copper; the base case resource cut-off grade reported herein is 0.12 per cent copper.

Resources are presented as undiluted and in situ for an open-pit scenario and are considered to have reasonable prospects for economic extraction. The constraining pit shell was developed using overall pit slopes of 48 degrees in bedrock and 20 degrees in overburden. The pit optimization to develop the resource-constraining pit shells was performed using Geovia Whittle 2022 software.
The MRE wire frame was prepared using Leapfrog Edge version 2024.1.1 and is based on 1946 drill holes and 58,842 samples. The drill hole database includes recent drilling totalling 67,742 metres in 125 drill holes (Xstrata 2011 to 2012, Glencore Canada 2019 and Osisko Metals 2022 to 2024) and also incorporates historical drill holes totalling 519,435 metres in 1,863 drill holes (Noranda 1998 and earlier). Drill hole data verification was performed by verifying the coherence of the information but not its correctness; original logs and laboratory certificates were only available for 2011, 2012, 2019, 2022, 2023 and 2024 drill holes. The cut-off date for the drill hole database was Nov. 4, 2024.
Composites of five-metre to 10-metre lengths were created inside the mineralization volumes. A total of 26,499 composites were generated. High-grade capping was done on the composited assay data; composites were capped from 0.80 per cent to 2.40 per cent for copper, from 0.10 per cent to 0.20 per cent for molybdenum and from three grams per tonne to 10 grams per tonne for silver in the stockwork zones; at 1.10 per cent for copper, 0.12 per cent for molybdenum and five grams per tonne for silver in the porphyry; and from 1.00 per cent to 6.00 per cent for copper, from 0.01 per cent to 0.50 per cent for molybdenum and from five grams per tonne to 20 grams per tonne for silver in the skarn zones. A restricted search capping approach was also applied to the main skarn zone for molybdenum and silver.
Pit-constrained mineral resources for the base case are reported at a lower cut-off grade of 0.12 per cent copper in sulphide within a conceptual pit shell based on a lower cut-off of 0.12 per cent copper. The cut-off grades will be re-evaluated on a continuing basis in light of future prevailing market conditions and costs.
Contained copper in the resource includes sulphide copper only and soluble copper was ignored. It was assumed for this MRE that only the copper contained in sulphides could have economical potential. Therefore, the soluble copper that is present as oxides and carbonates was removed and significant oxidized zones are all located in the southwestern portion of the deposit. The proportion of the copper contained as soluble copper relative to sulphides is correlated to the depth of the mineralization. Therefore, depth from the original topographic surface was modelled and used to estimate the percentage of copper that would be contained as soluble copper within the MRE.
Specific gravity values were estimated using data available in the historical drill holes. Values were interpolated for most of the mineralized solids and a fixed value was used where the scarcity of the data did not allow for interpolation; the average value is 2.77 tonnes per cubic metre. Surrounding barren lithologies were assigned the average specific gravity value from all measured samples.
The modelled base-case pit shell measures 700 metres by 2,000 metres and reaches a maximum depth of approximately 800 metres.
Grade model resource estimation was calculated from drill hole data using an ordinary kriging (OK) interpolation method in a subblocked model using blocks measuring 10-metre-by-10-metre-by-10-metre in size and subblocks down to 1.25 metres by 1.25 metres by 1.25 metres. Blocks were then regularized to 20 metres by 20 metres by 10 metres.
The indicated and inferred mineral resource categories are constrained to areas where drill spacing is less than 100 metres and 300 metres, respectively, and show reasonable geological and grade continuity.

Cautionary statement regarding copper equivalent grades

Copper equivalent grades are expressed for purposes of simplicity and are calculated taking into account: (1) metal grades; (2) estimated long-term prices of metals: $4 (U.S.) per copper, $20 (U.S.) per pound molybdenum and $24 (U.S.) per ounce silver; (3) estimated recoveries of 92 per cent, 70 per cent and 70 per cent for copper, molybdenum and silver, respectively; and (4) net smelter return value of metals as percentage of the price, estimated at 86.5 per cent, 90.7 per cent and 75.0 per cent for copper, molybdenum and silver, respectively.

Cautionary statement regarding mineral resources

The mineral resources disclosed in this news release conform to standards and guidelines in National Instrument 43-101, Standards of Disclosure for Mineral Projects, and were prepared by independent qualified persons for purposes of NI 43-101. The aforementioned mineral resources are not mineral reserves as they do not have demonstrated economic viability. The quantity and grade of the reported inferred mineral resources are conceptual in nature and are estimated based on limited geological evidence and sampling. Geological data are sufficient to imply but not verify geological grade and/or quality of continuity. An inferred mineral resource has a lower level of confidence relative to a measured or indicated mineral resource and constitutes an insufficient level of confidence to allow conversion to a mineral reserve. It is reasonably expected, but not guaranteed, that the majority of inferred mineral resources could be upgraded to measured or indicated mineral resources with additional drilling. The technical report prepared in accordance with NI 43-101, including the mineral resources for the Gaspe copper project contained in this news release, will be delivered and filed on SEDAR+ under Osisko Metals’ issuer profile within 45 days of the date of this news release.

Qualified persons

The mineral resource estimate and other scientific and technical information in this news release have been prepared and approved by independent qualified persons for purposes of NI 43-101: Pierre-Luc Richard, PGeo, of PLR Resources Inc., with contributions from Francois Le Moal, PEng, of G-Mining for cut-off grade and pit shell optimization and Christian Laroche, PEng, of Synectiq for metallurgical parameters.

About Osisko Metals Inc.

Osisko Metals is a Canadian exploration and development company creating value in the critical metal sector, with a focus on copper and zinc. The company is in joint venture with Appian Capital Advisory LLP to advance one of Canada’s largest zinc mining camps — the Pine Point project, located in the Northwest Territories, for which current mineral resources have been calculated for the 2024 MRE (as defined herein). The project is owned by the joint venture Pine Point Mining Ltd. The current mineral resource estimate consists of 49.5 million tonnes at 5.52 per cent zinc equivalent of indicated mineral resources and 8.3 million tonnes at 5.64 per cent zinc equivalent of inferred mineral resources (in accordance with NI 43-101, Standards of Disclosure for Mineral Projects; see Osisko Metals’ June 25, 2024, news release). The Pine Point project is located on the south shore of Great Slave Lake in the Northwest Territories, close to infrastructure, with paved road access, an electrical substation and 100 kilometres of viable haul roads.

In addition to and aside from the Pine Point joint venture, the company acquired in July, 2023, from Glencore Canada Corp., a 100-per-cent interest in the former Gaspe copper mine, located near Murdochville in Quebec’s Gaspe peninsula. The company is currently focused on resource expansion of the Gaspe copper system, which includes this updated mineral resource as well as the previously released resource comprising indicated mineral resources of 495 million tonnes grading 0.37 per cent copper equivalent and inferred mineral resources of 6.3 million tonnes grading 0.37 per cent copper equivalent (in compliance with NI 43-101); see May 6, 2024, news release). The Gaspe copper mine hosts the largest undeveloped copper resource in eastern North America, strategically located near existing infrastructure in the mining-friendly province of Quebec.

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https://osiskometals.com/