O3 Mining (OIII) - End of Year Update & Investor Meetings, London

O3 Mining, an Osisko Group company, is a gold explorer and mine developer ready to produce from its highly prospective gold camps based in Quebec, Canada. It is well-capitalized and owns a 100% interest in all its Quebec assets (137,000 hectares). The company was founded in 1993 and is headquartered in Toronto, Canada.

Matt Gordon caught up with Jose Vizquerra, President, Director, and CEO, O3 Mining. Jose was previously working as the Executive Vice President of Strategic Development at Osisko Mining. He played a major role in the combination of Oban Mining Corp., Corona Gold Corp., Eagle Hill Exploration Corp., and Ryan Gold Corp. to form Osisko Mining. Currently, Jose serves as a Director at Sierra Metals Inc., and as an advisor to the Board at both Discovery Metals Corp. and Palamina Resources. He is the winner of the 'Young Mining Professionals of the Year" award in 2019. 

Company Overview

O3 Mining Inc. is a gold explorer and mine developer on the road to produce from its highly prospective gold camps in Quebec, Canada. The company benefits from the support, previous mine-building success, and expertise of the Osisko team as it grows towards being a gold producer with several multi-million-ounce deposits in Quebec. The company is listed on the Toronto Stock Exchange (TSX-V: OIII) and the OTC Markets (OTXQX: OIIIF). Niogold Mining Corp., ORCan Oilfield Services Ltd., Chalice Gold Mines (Quebec) Inc., Alexandria Minerals Corporation, and Harricana River Mining Corporation Inc. are the company's subsidiaries. 

O3 Mining has a 3.9Moz resource at Val D'Or, Quebec, one of the most prospective grounds in the world. The company's project is currently advancing towards the PFS (Pre-Feasibility Study). 

The Gold Market

The gold market has seen a positive run where the pricing surpassed the $1,800/oz mark within a week. As per certain banks and brokers, it is anticipated that the gold market will observe a push towards the retail side. Interestingly, the fundamentals for the gold market were in place throughout 2021, however, there was a lack of movement towards gold. It is expected that 2022 will have a strong run for the gold market. 

O3 Mining is in an ideal position to benefit from the upcoming bullish run. Its Camflo mine has been extended with high-grade and strong prospective holes. The company is awaiting assay results. The company's Marban resource will observe a major milestone upon the conclusion of the PFS planned in Q1 2022. 

The company is looking to publish the resource at the Bulldog deposit. This deposit has had multiple published reports in the past year. The company is looking to demonstrate the scale and expansion capacity of this deposit through a planned PFS. This study will bring the company one step closer to production. The company chose a PFS over a PEA (Preliminary Economic Assessment) as it carries a lower level of uncertainty than the latter. 

O3 Mining has a price point of $1,450 for a profitable operation. However, there are speculations in the market that the gold price will reach anywhere between $1,650-$1,800 in the coming months. Furthermore, the equity markets are anticipating that gold will reach the $2,000 mark in 2022. The added price margins will have a significant impact on the company's revenue generation. 

O3 Mining speculates that the upcoming bullish run in the gold market will create an environment of M&A (Mergers and Acquisitions) in favor of better prices. The recent takeover of Pretium Resources by Newcrest demonstrates this ongoing market activity. It is expected that this M&A activity will eventually result in trickle-down benefits for junior mining companies. The stagnant environment of the cryptocurrency market in recent times has also pushed investors towards the gold market in favor of better prospects. 

Ongoing Operations

O3 Mining commenced its operations with a focus on strategic cash generation. The company put efforts into divesting assets for a stake in other companies rather than cash. The company put together the Moneta Gold project which was later sold at a price of $45M and is currently valued at $60M.

The company initiated infill drilling at the Marban deposit to develop a resource for a future PFS. The operations also included drilling the exterior pit zone, leading to a growth in the resource. The company plans to publish the drill results by Q1 2022. 

O3 Mining has also drilled at the Bulldog deposit but due to spacing constraints, the company was unable to convert it into an inferred resource. The deposit is expected to feature 300,000oz gold in reserves. The company is looking to put out the resource, carry out an additional drill campaign, and publish an updated resource by Q3,2022. 

At the Camflo mine, the company collected historical data over a course of 6 months to develop a drill plan. The company has initiated drill operations at the site and is looking to publish results by January 2022. The resource update for the Marban deposit is scheduled for Q1, while the Bulldog deposit will have a resource in September, with a PFS planned in Q4 2022. 

Cash Position

O3 Mining has a current market cap of $140M with $100M in cash flow. The company has the financial resource to carry out drilling and exploration throughout 2022 as it looks for additional discoveries. The company isn't overly reliant on its share prices to advance its project. It is looking to put the project into production. In case the company is unable to generate value from the PFS, it will opt for a Feasibility Study that would cost an additional $5M. Following this, the company plans to either opt for a capital raise or undertake loans to build a mine. 

ESG Component

As per recent meetings with fund managers at the COP26 (2021 UN Climate Change Conference), it was found that out of the total $90Bn, $57Bn was allocated towards ESG (Environmental Social and Governance) compliant projects. 

O3 Mining published its initial ESG report in 2020. The company plans to continue publishing updated ESG reports to demonstrate the progress made. The ESG report was certified by Ecologo, confirming that the company's operations follow the best standards for ESG. O3 Mining is the third company that has been successful in attaining this certification. 

Targets 2021 and Beyond 

O3 Mining plants to demonstrate the potential for the Marban deposit. The rediscovery of the Camflo deposit indicates the presence of an additional 1Moz resource. These deposits collectively have the potential to grow the company's annual output from 115,000oz/year to 150,000-160,000oz/year. 

Once the company is successful in showcasing the size of the Bulldog deposit, it will enter production. The company is looking to become an intermediate producer within the next 7 years. 

Once the company initiates production at the Marban and Bulldog deposits, it is looking to reach 200,000oz in annual production. O3 Mining has planned a PFS in 2022, followed by a Feasibility Study in Q2, 2023. Following this, the company will need up to 2 years to acquire permits before entering production. As the company awaits the permits, it will continue to advance its other assets in parallel.

To find out more, go to the O3 Mining Website