Canada’s Osisko Mining Corp. will acquire Queenston Mining Inc. for C$550 million. A Canadian mineral exploration and development company, Queenston’s primary focus is the Kirkland Lake gold camp, which is “on trend” with Osisko’s Canadian Malartic mine.
“Queenston is an excellent strategic fit within our existing Canadian portfolio and in our view, is one of the best undeveloped high-grade opportunities and significant open-pit targets in Canada,” said Sean Roosen, president and CEO, Osisko. “Osisko has always sought to be a part of camps rather than isolated assets and this transaction provides us with a highly strategic land package in another prolific Canadian gold camp.”
Osisko will assume ownership of Queenston’s historic Kirkland Lake gold camp as well as other various interests in Quebec, Manitoba and Ontario. The flagship Upper Beaver project is progressing with advanced exploration leading to new shaft development and a definitive feasibility study in 2013.
In February 2012, Queenston completed a Preliminary Economic Assessment (PEA) on the Upper Beaver project outlining an initial 10 year mine life operating at 2,000 metric tons per day (mt/d). Over the life of mine, Upper Beaver is expected to produce a total of 1.1 million oz of gold at an average rate of 120,000 oz/y and average cash costs of $386/oz (net of by-product credits). Using a gold price of US$1,275/oz, the PEA shows that Upper Beaver has an after-tax internal rate of return of 22.1%.
In addition, exploration activities are ongoing at the four other 100%-owned deposits in Kirkland Lake that will provide additional feed for a central milling facility. The Kirkland Lake gold properties in aggregate currently host an NI 43-101 compliant resource of 2.1 million oz of gold in the indicated category (contained within 13 million mt of material grading 5 g/mt) and 1.9 million oz of gold in the inferred category (contained within 13 million mt of material grading 4.5 g/mt).