Osisko Having Canadian Malartic Deja Vu at Canadian Kirkland Zone

Osisko Having Canadian Malartic Deja Vu at Canadian Kirkland Zone

Osisko Mining (TSX:OSK) is currently the subject of a hostile $2.6-billion takeover bid from Goldcorp (TSX:G,NYSE:GG), but at the moment, the Quebec-based company has something else on its mind.

That something is Friday's discovery of a "potentially large, bulk tonnage disseminated gold deposit" at its Kirkland Lake project, located in Northeastern Ontario. The discovery, which the company has dubbed the Canadian Kirkland zone, is made up of a type of mineralization that thus far has not been reported at Kirkland Lake — specifically, it is a "fine disseminated gold and pyrite in a pinkish-gray to brick red altered zone that completely replaces volcanic tuffs," according to a company press release.

Commenting positively on the discovery, Sean Roosen, Osisko's president and CEO, said, "[t]his is the first of what we expect could be one of many discoveries made using our bulk tonnage model in the Kirkland Camp. The discovery was based on compilation work and our 2013 exploration work in the camp, the first time that Kirkland has seen a 'district wide' approach to identify bulk tonnage targets."

Speaking to Mineweb's Kip Keen, Robert Wares, vice president of exploration at Osisko, was a little more revealing. He said that the discovery "feels like a Canadian Malartic deja vu." That, Keen explains, means he believes that in discovering this new mineralization, Osisko is "on to previously under-appreciated — or totally un-cared for — disseminated gold mineralization in host rock that was nearly completely ignored by companies that explored the property in the past."

That's understandable, Keen notes, given that in the past, when gold prices were lower, the focus was on high-grade gold in Canadian camps. As a result, "host rock — outside the veins and veinlets that typically have hosted gold in Kirkland and other Archean gold camps in Canada — was largely ignored and untested."

Now, however, it makes more sense for Osisko to take another look at the area, which Keen describes as "quite well covered by past drilling."

Indeed, the company plans to waste no time in doing so. Osisko said in last week's press release that it plans to "immediately" begin a broad-scale drill program that will test an area covering the Canadian Kirkland and Commodore Kirkland zones, along with "other previously drilled zones in the immediate area that have been historically associated with pink 'syenites' and 'trachytes.'"

At close on Monday, shares of Osisko were selling for $6.98 each. The company continues to encourage shareholders to reject Goldcorp's offer.


Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Related reading:

What Goldcorp's Osisko Bid Means

Goldcorp Extends Offer for Osisko, Trial Set for March

Top 5 TSX Gold Short Positions

Osisko Having Canadian Malartic Deja Vu at Canadian Kirkland Zone from Gold Investing News