O3 Mining (OIII) - Re-Rate Expected after PFS in Q3/22

O3 Mining Inc. (formerly Chantrell Ventures Corp.), an Osisko Group company, is a gold explorer and mine developer. The company is well-capitalised and owns a 100% interest in all its properties (137,000 hectares) in Quebec. The company is focused on delivering superior returns to its shareholders and long-term benefits to its stakeholders.

Matt Gordon caught up with Jean-Felix Lepage, Director of Operations, O3 Mining. Mr. Lepage brings over 15 years of industry experience to the team. He serves as the Country Manager for the Abitibi Greenstone Belt. His role includes the coordination of activities along with technical studies. He also serves as the Studies Director for the company.

Company Overview

O3 Mining is a gold explorer and mine developer ready to produce from its highly prospective gold camps in Quebec. It is listed on the Toronto Stock Exchange (TSX-V: OIII) and the OTC Markets (OTCQX: OIIIF). OrCan Oilfield Services Ltd. and Harricana River Mining Corporation Inc. are the company’s subsidiaries.

O3 Mining is currently focused on the Marban project. The company is working on the PFS (Preliminary Feasibility Study) and is looking to enter production by 2026. The PFS is expected in Q3 2022. The company conducted a PEA (Preliminary Economic Assessment) in 2020. Since then, it has updated the resource, which was the first step toward the planned PFS. Currently, the company has 2.3Moz of (M&I) Measured and Indicated Resource, which forms the basis of the PFS.

The company also conducted several trade-off studies to further optimise the project’s concept. The first study was focused on the tailings dam, which is a large setup. It has developed a new concept where the starter dam will be functional for the first 5 years of operation. Next, the company will move to a smaller place that would be mined in the first 5 years.

The second trade-off study is focused on mill recovery. Lab tests demonstrated much higher recoveries than the PEA. It also carried out trade-off studies surrounding the mill, targeting a smaller ground and a CIP (Carbon in Pulp) circuit instead of a CIL (Carbon in Leach) circuit. This change is expected to bring better recoveries from the operation. Interestingly, the company has been successful in increasing the recovery by 50%, making it a 6Mt/year or 17,000t/day operation. This change facilitates a direct increase in the overall production profile.

The PFS is really important for the company as it will be the project’s first economic study. A project’s PEA is known to be highly variable, with up to +/- 30% in some cases. Meanwhile, a PFS offers much higher market confidence. O3 Mining has seen a resurgence in the market and people are now trying to understand the story as it gets closer to production. The company has been continuously working on de-risking the project by way of technical studies. It is also working on an Environmental Baseline Study which is expected to conclude this year. Notably, the company is running ahead of schedule for the baseline study. Following this, the company will conduct a Feasibility Study in 2023. The combination of both these studies will have a major impact on the project assessment. It is looking to enter production by 2026.

O3 Mining is in discussion with various agencies in Quebec that are a part of the process. The company is cognizant of the various steps required in the process and unless the production metrics are really low, it won’t require any major changes to the operations. It is an inclusive process as various comments and suggestions from the agencies are integrated and will be a part of the final submission.

The company currently has a 2.3Moz M&I resource. Interestingly, there is still an exploration upside around the pits. Currently, there are 4 drill rigs deployed at Marban, where 2 rigs are drilling close to the pit. This region is an extension of the pit and lies on the same trend as other areas at the property. The company does not require a technical study in order to move towards permitting. The company is looking to ensure that the project moves ahead in a disciplined manner. It is currently focused on de-risking the project and bringing it online in 2026. It has the flexibility to increase the resource. It is looking to finalise the infrastructure development through the PFS.

O3 Mining has the opportunity to work with its neighbours in order to unlock some value through potential M&A (Mergers and Acquisition) activity. It is currently working on factors that it can directly control such as improvements in project economics and de-risking through technical studies.

ESG Considerations

The company is engaging its stakeholders and is working with its neighbours, local residents, and the First Nations community. The company recently had a second meeting in order to engage the community and create a strong working relationship. It also has an Eco Logo certification which is being worked on a daily basis. This year, the project will be analysed by an auditor, that would assist the company in conducting operations as per the required norms.

O3 Mining is looking to garner support from the local population and the First Nations community. Focusing on an ESG (Environmental, Social, and Governance) compliant operation has helped in developing trust locally.

The company is looking to follow due process with the PFS and enter production by 2026. It does not believe in taking shortcuts or cutting corners. It is focused on market conditions beyond the short-term as being too focused on the short-term might distract it from the long-term targets. As a result, the company is taking a step-by-step and disciplined approach to advancing the project.

To find out more, go to the O3 Mining website