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In This List

Eyeing record-length drillhole, Osisko targets gold in Windfall's roots

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Eyeing record-length drillhole, Osisko targets gold in Windfall's roots

Osisko Mining Inc. is about 2,000 meters into a drillhole at the Windfall Lake gold project in Quebec that it hopes will set a Canadian record for length as it gambles on the potential for deep discovery.

President and CEO John Burzynski said the Canadian record is 3,454 meters downhole by diamond drilling, a type of drilling that returns a cylindrical sample of rock.

The gold developer, backed by a veteran exploration team, is largely focused on outlining gold resources in deposits that are within about 1,500 to 2,000 meters of surface. But with the deep hole, Osisko is chasing a blind target that may or may not be beneath known deposits at Windfall, where the company has undertaken a massive drilling program in recent years that is approaching 1 million meters of drilling.

So far, Osisko has outlined 754,000 ounces of gold grading 8.17 g/t gold in indicated resources and 2,366,000 ounces of gold grading 7.11 g/t gold in inferred resources at Windfall.

The deep hole, announced in April, will take about half a year to drill and is no sure thing in terms of discovery.

"The model we're working on right now is that all of these known fingers of mineralization ... are all potentially linked to a hand," Burzynski said. "What we're looking for is the hand. It may not be there."

The company's strategy rests on the notion that the smaller deposits closer to surface may be linked to a larger deep deposit near the top of an ancient welling of magma long since hardened to rock, where gold may have been deposited, possibly at a larger scale than the deposits near surface. Gold explorers often drill with similar expectations with mixed results.

But for Osisko there is a silver lining, Burzynski said. If it does not hit, he said the geological knowledge from the drill hole may give the company an edge in exploring other deep targets in Canada's gold camps, where some mines have been known to stretch more than 3,000 meters underground.

"The sky's the limit in the old camps," Burzynski said. "A lot of people forget that most of those camps outside the mines were never drilled below 400 meters. Really, I think this is where all the new discoveries are going to come from in the next cycle, which looks like it is upon us right now."

The price of gold has been surging, briefly breaking above US$1,500 per ounce in recent trading, possibly driven by recent global trade tensions and supported by a bond market where negative rates have become more common. That, in turn, has boosted market interest in gold equities.

Osisko plans to pair the geological knowledge it gains from drilling the hole with geophysical surveys and possibly use that to reconsider deeper targets along the 250-kilometer stretch of prospective ground it controls near Windfall, Burzynski said.

The company's deep-hole approach does not come cheap. It will end up costing more than C$1 million to drill, with the final tally depending on how long it takes to reach target depth, Burzynski said. Osisko contracted Major Drilling Group International Inc. for the drilling.

While drillers may charge on a per-meter basis, Burzynski said the company will not on this project, where the pace of drilling slows as depth increases and the chances of veering off course grows higher. The drillhole has already been restarted once to reset targeting.

"No driller in their right mind would give you a per-meter quote on it," Burzynski said.