The Northern Miner June 12 2017 Issue

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LUKAS LUNDIN: HIS TAKE ON METALS, OIL, POLITICS AND MORE / 3 Geotech_Earlug_2016_Alt2.pdf 1 2016-06-24 4:27:20 PM

SPECIAL FOCUS

MINING ENERGY

Delving into thermal coal, uranium and oilsands development projects and markets / 9–15

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JUNE 12-25, 2017 / VOL. 103 ISSUE 12 / GLOBAL MINING NEWS · SINCE 1915 / $3.99 / WWW.NORTHERNMINER.COM

Trek extends mineralization at Aurizona BRAZIL

| Feasibility study due soon on restarting production from open pit

Osisko Gold to buy Orion’s royalties for $1.1B M&A

| Transaction to double Osisko’s near-term cash flow

BY SALMA TARIKH starikh@northernminer.com

S

hallow step-out holes drilled at Trek Mining’s (TSXV: TREK) wholly owned Aurizona gold project in Brazil have extended gold mineralization west of the pastproducing Piaba open-pit mine. Drill results from some of the first 6,500 metres of a 30,000-metre drill program this year indicate that the Piaba gold deposit continues at depth and along strike west of the pit, and the company says that continued infill drilling should lead to a resource increase. Aurizona hosts proven and probable reserves of 18.6 million tonnes grading 1.62 grams gold per tonne for 969,000 contained oz. gold. The reserves were calculated in June 2016 using a US$1,104 per oz. gold price. The project’s pit-constrained, measured and indicated resource stands at 29.9 million tonnes grading 1.67 grams gold for 1.6 million contained oz. gold and inferred of 2.7 million tonnes at 0.72 gram gold for 61,600 contained oz. gold. Gold reserves are contained mostly within the Piaba pit, which remains open along strike and at depth. Piaba West is a potential extension of the Piaba gold deposit and is the first of several near-mine targets to be drilled in the US$7.5million program. Highlights from Trek’s first 18 drill holes include 3.90 grams gold over 11 metres in drill hole 575, which was 300 metres beyond the westernmost edge of the Piaba open pit, and starting from 49 metres downhole. Another hole, 576, intersected 0.71 gram gold over 6 metres another 100 metres west of 575, from 110 metres deep. Other results were 2.63 grams gold over 9 metres in hole 572; 0.99 gram gold over 15 metres in hole 571; and 1.22 grams gold over 33 metres, including 2.27 grams gold over 11 metres, in 569. “These intercepts have excellent grades and are well above reserve grade at Piaba,” mining analyst See TREK / 8

Osisko Gold Royalties’ bid would see it acquire streams on Pretium Resources’ Brucejack gold mine (left), Stornoway Diamond’s Renard diamond mine (top right) and Audley Capital and Orion Mine Finance’s Mantos Blanco copper mine.   PRETIUM RESOURCES, STORNOWAY DIAMOND, ANGLO AMERICAN BY MATTHEW KEEVIL mkeevil@northernminer.com VANCOUVER

O

sisko Gold Royalties (TSX: OR; NYSE: OR) CEO Sean Roosen says his firm had been “keeping the powder dry” in anticipation of a transaction that would make it a “world-class royalty company.” That patience paid off on June 5 in a blockbuster, $1.1-billion deal with Orion Mine Finance to buy an expansive portfolio of Orion’s royalties, streams and precious metal offtakes. Osisko will pay $675 million in cash — plus $450 million in shares — for six streams, 61 royalties and seven offtake agreements. The transaction will boost the company’s producing assets from five to 16, and could transform it into a high-growth, more than 100,000 equivalent oz. gold producer, thanks to three cornerstone assets. These are: a 9.6% stream on Stornoway Diamond’s (TSX: SWY; USOTC: SWYDF) Renard diamond mine in north-central Quebec; a 4% gold and silver stream on Pretium Resources’ (TSX: PVG; NYSE: PVG) Brucejack mine in

“WE KEPT OUR POWDER DRY WAITING FOR A TRANSACTION JUST LIKE THIS ONE.”

PM40069240

SEAN ROOSEN CEO, OSISKO GOLD ROYALTIES

northwestern British Columbia; and a 100% silver stream on the Mantos Blancos copper mine in Chile, which Anglo American (US-OTC: AAUKF; LSE: AAL) sold to UK-based investment firm Audley Capital and Orion for $300 million in 2015. Osisko reports that the transaction will immediately double its near-term cash flow, while increasing equity dilution by less than 50%. The company forecasts production of over 100,000 equivalent oz. gold in 2018, with growth projected to over 140,000 equivalent oz. gold by 2023. Osisko generated $53 million in net cash flows from operations, while producing 38,000 equivalent oz. gold in 2016. “It’s a rare opportunity to see a portfolio of this quality and size on

the market,” Roosen said during a conference call. “We know a lot of these assets very well based on historic work our team has done. We’ve either been a participant in these projects, or taken a look at them through various stages. We’re quite comfortable with the portfolio, and perhaps had a more aggressive view on some of the projects based on our work. We knew this was the right fit for us, and we pursued this deal with prejudice.” Osisko’senlargedportfoliowillhave 131 royalties and streams, including 16 revenue-generating projects. The company’s f lagship gold assets remain its 5% net smelter return royalty (NSR) on Agnico See OSISKO / 2

NEW GOLD: RAINY RIVER TO PRODUCE BY SEPTEMBER / 7

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