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Ahead

Osisko Mining Corp.

The Malartic gold mine in the highly productive Abitibi Gold Belt of northwest Quebec is very different from those around it. Most mines are deep, exploiting high-grade gold deposits. However, the Osisko Mining Corporation, a junior mining company, is in the process of developing an open-pit mine to

exploit what it believes will become a truly world-class gold resource.

Gay Sutton talks to Osisko Mining Corporation’s general manager, Denis Cimon, about the company’s plan to fast-track

the development of the Malartic gold deposit in northern Quebec and take the risk out of the project by beginning town relocation

work and purchasing equipment ahead of the feasibility study

gameoftheAhead

Osisko Mining Corp.

“When we realized that we had the acceptance of the town council and over 85 percent of the population, we started a program of drilling to define the area of the deposit,” explains general manager Denis Cimon. The drilling covered the entire area in a grid pattern every 25 meters. “In the town, people had drills in their backyards and in their driveways.”

This yielded more precise data on the size and value of the deposit. Based on these encouraging calculations, the company embarked on the prefeasibility, environmental and feasibility studies. At the same time, however, confident that the discoveries would yield a highly lucrative mine, the company began to ramp up its operations. Staff members were appointed to run the operation, one of whom was Cimon. A construction company

and mining contractors were brought on board, and a $110 million relocation project got under way to move around 13 percent of the town to a new location on the northern side of town.

“One of the big local concerns was that we would start the relocation process, find the project was not as strong as we believed, and stop it. And they would end up with half the population relocated,” Cimon says. “We therefore made a commitment that once we started the relocation we would complete it, regardless of the results of the feasibility study.”

The project entailed moving 205 homes and five institutions. In all, 140 new houses were built and more than 60 purchased. The southern boundary of the town is to be shielded from the open-cast mining operation by what the company calls a green wall: a wall of earth planted with trees and flowers, not only cutting out much of the noise and dust but also providing a leisure facility. Cimon says, “We’re working with the town’s mining museum to build a viewing center so that people can some to the pit and see the operations.”

In parallel with the relocation work, the company

The 230-square-kilometer property, 100 percent owned by Osisko, has been worked in the past. Between 1935 and 1983, deep mining of the high-grade Malartic and Barnat veins yielded over 5 million ounces of gold. But subsequent exploration efforts continued to search—fruitlessly—for further deep high-grade gold resources.

Convinced that there was another way to do things, Osisko acquired the property and began looking for lower-grade deposits close to the surface. Combining its own exploration data with that of previous explorations, the company found what it was looking for: a large area with the potential to become an extensive and highly profitable surface mine.

Part of the gold resource, however, was believed to stretch under the town of Malartic (population 3,600), about 550 kilometers northwest of Montreal. So the first thing the company did was to initiate an outreach to the local community, communicating with the town council and the citizens, building relationships, exchanging information and forming a community consulting group.

“We made a commitment that once we started the relocation we would complete it, regardless of the results of the feasibility study”

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began procurement of the heavy equipment it would need. “For us, it was a way of de-risking the project,” Cimon points out. By June 2009, most of the equipment had been purchased and 75 percent of it had been delivered to the site, while the parts that needed special warehouse conditions, such as the motors, were stored in Toronto and Montreal.

Since beginning the relocation work and procurement, the company has successfully completed the feasibility studies and public hearings. “The process was very informative,” he admits. “Sometimes they were rough on us. But it’s a good democratic process, and it has been beneficial to both parties.”

The construction permits were received in August 2009, and work immediately began preparing the foundations for the mine buildings. These include an administration building and truck shop that would accommodate twelve 240-ton trucks, a warehouse, and a massive $400 million mill that will house a 55,000-ton SAG (semi-autogenous grinding) mill with a 26,000-horsepower motor and three further 16,000-hp ball mills.

The town of Malartic has benefited in many ways. The mine has created a large number of jobs and will continue to do so. Most of the contractors currently on site are local, and this has helped to cement good relationships, ensure quality and speed up the construction work. If everything continues to go according to schedule, milling should commence in the first quarter of 2011. www.osisko.com

MININGCORP. www.osisko.com

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