Osiko Metals - ZINC

Key Anacon

The Key Anacon project is located approximately 20 km south of the town of Bathurst, New Brunswick and 16 km southeast of the former Brunswick No.12 mine. It is accessible by paved roads. The property contains two known Bathurst-type volcanogenic massive sulphide deposits containing zinc, lead, copper and silver. The Key Anacon Main Zone Deposit and Titan Zone Deposit are situated at the same stratigraphic horizon that hosted the Brunswick No. 12 & No. 6 mines. The property covers approximately 12 kilometres of favorable Nepisiguit Falls stratigraphy that also extends onto the surrounding claims held 100% by Osisko Metals.

Except for sporadic exploration programs conducted in 1992-1993 and 2000, almost all of the drilling was completed in the 1950’s and 60’s, prior to currently required standards for quality assurance and quality control. The earlier drilling led to the establishment of a 460-metre-deep shaft, a ventilation raise, eight levels and three sub-levels at the Main Zone. The deposit is open at depth and along strike.

The Key Anacon Property is part of the East Bathurst Mining Camp (“EBMC”) that comprises the Brunswick Horizon extending from the prolific Brunswick No.12 and No. 6 Mines to Gilmour South and extending for an additional 30 kilometres along the surface trace of the Portage River Anticline before reaching the Key Anacon Project. Gilmour South is located approximately 27 kilometres southwest of, and connected to, the Key Anacon site by major forestry roads. Osisko Metals has secured all of this favorable stratigraphy and looks forward to unlocking the potential in the poorly explored corridor beneath the Carboniferous cover from Gilmour South to Key Anacon.

Current mineral resources are reported by Osisko Metals for Key Anacon as follows:

Table 1: Mineral Resource Estimate as Reported by AGP Mining Consultants Inc. (1)

Mineralized Zones

Resource Category

 

Grades (@ 5.5 ZnEq cut-off)

In-situ Metal

Tonnes

Zn

Pb

Cu

Ag

ZnEq

Zn

Pb

Cu

Ag

mil

%

%

%

g/t

%

mil

mil

mil

mil

lbs.

lbs.

lbs.

 oz

Key Anacon Main

Indicated

1.67

6.02

2.52

0.14

74.20

9.31

221.0

92.5

5.1

4.0

Key Anacon Titan

0.29

4.36

1.57

0.65

38.80

7.25

28.2

10.1

4.2

0.4

Total Indicated @ 5.5 ZnEq cut-off

1.96

5.77

2.38

0.22

68.90

9.00

249.1

102.6

9.3

4.3

Key Anacon Main

Inferred

0.61

5.83

1.98

0.05

68.20

8.49

77.7

26.5

0.6

1.3

Key Anacon Titan

0.98

4.12

1.62

0.78

42.90

7.35

89.5

35.2

17

1.4

Gilmour South

2.26

5.74

1.30

0.19

44.30

8.08

286.8

64.8

9.4

3.2

Total Inferred @ 5.5 ZnEq cut-off

3.85

5.34

1.49

0.32

47.70

7.96

453.0

126.4

27.0

5.9


Mineral resources are estimated in conformance with the CIM Mineral Resource definitions referred to in NI 43-101 Standards of Disclosure for Mineral Projects. This mineral resource estimate covers the Gilmour South Deposit, and the Key Anacon deposit’s Main Zone and Titan Zone. The independent qualified person for the 2019 MRE, as defined by NI 43-101 guidelines, is Pierre Desautels, P. Geo, of AGP Mining Consultants Inc. Effective date is January 14, 2019.

The current resource estimate is reported using a Zn Equivalent (ZnEq) cut-off grade of 5.5%. The determination of the cut-off grade was based on:
• Mining cost of USD$45/Tonne.
• Total operating cost of USD$70/Tonne.
• This MRE is based on a zinc price of US$1.10/lb, a lead price of US$0.90/lb, a copper price of US$2.72/lb and a silver price of US$15.90/oz and a revenue factor of 1.1.
• Recoveries of 84% Zinc, 60% Lead, 52% Copper and 65% Silver.

The MRE is based on drilling by Osisko Metals comprising 38,475 metres in 92 drill holes which includes 32 holes at Gilmour, 35 holes at Key Anacon Main Zone and 25 holes at the Titan Zone. The remaining holes are historical and were drilled by a number of operators namely, Key Anacon Mines Limited (1953-1966), Rio Algom Limited (1992-1993), Noranda Inc (2000), Hunter Brook Holdings Limited (2015). The use of which was validated by a drill hole collar survey where available, original assay certificates, drill logs and twin drilling.

Table 4. Eastern BMC MRE – Total Drill Hole Statistics

Deposit Name

In Database

Within Mineralized Wireframes

# of Holes

Length (m)

# of Assays

# of Holes

Length (m)

# of Assays

Key Anacon Main

376

73,523

5,846

263

4,564

2,394

Key Anacon Titan

92

32,602

2,404

38

1,217

1,238

Gilmour South

110

50,328

2,215

39

958

871

Total

578

156,453

10,465

340

6,739

4,503


Table 5. Eastern BMC – Osisko Metals Drill Hole Statistics

Deposit Name

In Database

Within Mineralized Wireframes

# of Holes

Length (m)

# of Assays

# of Holes

Length (m)

# of Assays

Key Anacon Main

35

13,522

2,115

26

580

608

Key Anacon Titan

25

9,498

1,137

21

630

666

Gilmour South

32

15,455

913

17

500

531

Total

92

38,475

4,165

64

1,710

1,805


The full technical report will be available soon.

Exploration potential at Key Anacon and the Company’s adjacent properties is considered to be excellent on the basis of the presence of the Brunswick Horizon stratigraphy and the expansive zones of mineralization and alteration. The mineralized horizon at both the Titan Zone and Main Zone are open at depth and along strike. Exploration and development in the 1950’s and 1960’s were terminated due to the pullback of the zinc commodity price at that time. Since then, only two minor exploration programs were conducted by major mining companies.

Note 1. These mineral resources are not mineral reserves as they do not have demonstrated economic viability. The quantity and grade of the reported Inferred Mineral Resources in this estimation are conceptual in nature and are estimated based on limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. For these reasons, an Inferred Mineral Resources has a lower level of confidence than an Indicated Mineral Resources and it is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

Note 2. Map Reference: Brunswick 6 and 12 Mines past production statistics. Source: The Government of New Brunswick, Department of Energy and Resource Development, Energy and Mines Division Mineral Occurrence Database.

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