O3 Mining (OIII) - Fundamentally, the Next Mid-Tier Val-d'Or Gold Mine

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 founded in 2019, with an RTO 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. 

Jose's educational credentials include a General Management Program at the Wharton School of Business. He holds an M.Sc. in Mineral Exploration from Queens University and a B.Sc. in Civil Engineering from UPC Universidad Peruana de Ciencias Aplicadas. Additionally, he is a Qualified Person pursuant to National Instrument 43-101. 

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 Minings' assets are based in Val-d'Or, Quebec, one of the best mining jurisdictions in the world. The company plans to put a mine into production by 2026. The company is building a mid-tier mining company and is taking all the key steps to enter production by 2026. Its assets include an 80km area in Val-d'Or where 200Moz has been mined so far. 

O3 Mining has already concluded a PEA (Preliminary Economic Assessment) and is looking to put out its new resource in Q1 2022. The company is looking to reach 150,000oz production on a yearly basis. It is currently drilling at Omega which the company feels has a strong potential for discovery. It is looking to minimize risk with existing resources while maximizing fundamental value at Marban, a property with an upside for a new discovery. 

Cash Position

O3 Mining's current market cap is $130M. It has invested $60M in the Marban property and $50M in the Alpha property for advancing these projects. The company also has $110M in cash and equivalence, out of which the company plans to spend another $20M by the end of 2022, bringing its liquidity to $90M. 

O3 Mining's Marban property is valued at $700M at a gold price of $1,750 with a strong potential for high grade. Its Alpha asset is valued at a minimum of $25M, bringing the company's valuation to $725. Taking into account the overall assets, the company believes it's undervalued by the factor of 6. 

Project Strategy

O3 Mining has taken part in a host of community meetings. It is currently working on acquiring several permits for its assets. It is collecting samples from the water, the flora, the fauna along with geochemical samples and assessing the reactions with the ore present within the waste rocks. 

The company is focused on bringing the Marban property into production, currently, it is working towards a PFS with a FS (Feasibility Study) planned in the future. Once the FS has concluded, the company will become bankable and will need to maintain its cash reserves. O3 Minings CapEx (Capital Expenditure) currently stands at $256M, which is significantly lower than projects of comparable size. However, this needs to be established further through the planned PFS and FS.

The company has carried out drill operations at the Camflo property and has uncovered high-grade gold reserves. This deposit has the potential to add another 1Moz to the company's existing resource. This resource is located beside the existing mine. 

At the Marban property, O3 Mining has a new resource planned for Q1 2022 where the company is looking to move from inferred to indicated, approaching the M&I (Measured and Indicated) category. The company is looking to carry out this operation through an open pit instead of an underground mine. Following this, the company plans to publish resource updates from the Camflo property. 

The Alpha property features 300,000oz as a potential resource. This area is planned for a new resource update by the end of Q3,2022. O3 Mining is prioritizing its PFS  which will conclude by 2022 end. Following this, the company plans to move into FS within the coming 8 months. 

Following the FS, the company plans to move into the construction phase. Additionally, the company plans to carry out a year-long drill operation and has proposed to its investor base to get a proper valuation done on the developmental phase of the project. This is expected to lead to a PFS along with 2 discoveries by the end of 2022. 

Overall, the company is looking to develop 2 areas of production that will provide a long mine life with a lot of value generated for its shareholders. 

M&A Considerations

O3 Mining acquired 80% undivided interest in the Centremaque property through its wholly-owned subsidiary, Alexandria Minerals Corp. which is located within its Alpha Property in Val-d'Or, Quebec. This acquisition is a part of the company's strategy for divesting its assets. The company also has shares in other companies which has allowed for optionality. 

This property has the potential to generate additional revenue which could help pay for the company's CapEx or become a crucial component for building the Marban property without raising additional capital.

Currently, O3 Mining is not looking to buy back its shares. It is looking to attain the flexibility of buyback once its share price reaches the $1 mark. The company has shown interest in Canadian Malartic from an M&A perspective. 

Drilling Operations 

O3 Mining has ongoing drilling operations at its properties. As per the 18th October press release, the company found high-grade 5.7g gold over 14.5m. Delays have been caused due to assay results from the labs for the company's samples. 

A large part of the drilling program is focused on infill and the expansion of the Marban property, which is an integral part of concluding the PFS. The company currently has 8 rigs in operation. The majority of these rigs are shorthold employed at the company's pits to convert the inferred resources to M&I. Through infill drilling, the company has seen an average grade of 1g/t with a possibility of higher grades as the drilling program continues. 

O3 Mining is carrying out drilling operations at the Omega property. Its deposits feature different styles of mineralization. For instance, the Camflo property features intrusive-related mineralization, Marban is sheer-hosted, while Omega features Sigma-Lamaque mineralization. The Bull site features mineralization similar to the Bell Mine at Timmins. These different styles of mineralization have historically produced big mines in the district. The company's priority is to put the Marban property into production while seeking discoveries at the Omega deposit. 

The company has placed a $20M budget to ensure that the changing gold prices over the next 3 years won't affect the ongoing operations. The company isn't looking to raise additional capital in the coming 14 months.

To find out more, go to the O3 Mining Website