Source: Abitibi Royalties Inc
Abitibi Royalties Inc. (TSX VENTURE:RZZ) ("Abitibi
Royalties" or the "Company") is pleased to provide an update on the
Company's net smelter royalties ("NSR") at the Canadian Malartic Mine,
near Val-d'Or, Québec.
Malartic CHL - Odyssey North Zone (3% NSR)
Abitibi Royalties holds a 3% NSR on the Odyssey North Zone
located within the Malartic CHL Property. Odyssey North is proximate to
the Odyssey South Zone and together, these zones comprise the "Odyssey
Zones", "Odyssey deposit", "Odyssey" or "deposits" that is east of the
main Canadian Malartic Mine open pit. The Canadian Malartic Mine and
Malartic CHL Property are jointly operated by Agnico Eagle Mines Limited
("Agnico Eagle") and Yamana Gold Inc. ("Yamana") through the Canadian
Malartic General Partnership.
A) Odyssey - Exploration Update
The Company observes that during the third quarter of 2016, a
total of 56 drill holes (40,019 metres) were completed at Odyssey,
bringing the year-to-date total to 113 holes (89,774 metres). The
Company understands that drilling at Odyssey is expected to continue
through year-end with an increased budget, previously established at
Cdn$13.5 million (95,000 metres of drilling). As stated by Agnico Eagle
at the Denver Forum (September 20, 2016), nine drill rigs are active at
the project.
Yamana stated in its Q3-2016 News Release, "Drilling during
the third quarter focused on defining the margins of both deposits and
adding infill holes to upgrade the potential resources to an inferred
status. Drilling in the fourth quarter will continue this work and
provide additional intercepts to better define potential high grade
cross cutting structures. The Company is excited about the results
received to date and looks forward to receiving a maiden Inferred
Mineral Resource estimate in the first quarter of 2017."
Agnico Eagle stated in its Q3-2016 Conference Call,
"[Odyssey] certainly was one of the reasons that both Yamana and Agnico
Eagle were attracted to the opportunity of Osisko. There are two zones,
Odyssey North and Odyssey South. We have traced Odyssey North Zone from
600 to 1,300 metres below surface, it's a large zone with a strike
length over one kilometre".
B) Odyssey - Resource Estimate
Abitibi Royalties has been advised that an inferred mineral
resource is expected to be estimated for Odyssey North with the
operators fourth quarter and year-end financial results due in February
2017. Abitibi Royalties anticipates receiving a separate annual reserve
and resource estimate for the areas at the Canadian Malartic Mine where
it holds a royalty sometime after the operator's fourth quarter and
year-end financial results are released. Yamana stated during its
Q3-2016 Conference Call that "Infill drilling of the Odyssey deposits
has returned positive results" and, referring to future steps after the
initial inferred resource, "Drilling will continue into Q1 or Q2 of 2017
to develop indicated resources that could form the basis of a
pre-feasibility study".
C) Odyssey - Possible Production
Yamana states in its Q3-2016 News Release "This deposit
(Odyssey) supports optionality for enhanced production and life of mine"
and during the Denver Gold Forum Yamana indicated that Odyssey could
operate between 8,000-10,000 tonnes per day (tpd). The operators have
provided a range for Odyssey North's gold grade at between 1.5 to 3.0
grams per tonne (gpt), with an average grade being shown as 2 gpt
(Agnico Eagle Exploration News Release July 27, 2016 and Yamana's
Q2-2016 Results Conference Call Presentation July 29, 2016).
Drill Hole Data and Locations
The Company has not received all, or, in some cases any of
the drill hole information since Agnico Eagle and Yamana assumed
operational control of the Malartic CHL Property in March 2015. Odyssey
North strikes east-southeast and dips deeply to the south, with the
mineralization on the eastern portion of the discovery appearing to
straddle the Malartic CHL Property boundary at depth (please refer to
the Company's plan map in its corporate presentation located at www.abitibiroyalties.com).
The Company has not independently verified the location of the
published assay results, nor subsequent drilling at Odyssey North and
the Company can make no assurances that all of the assay results
released to date, nor all of the additional drilling targeting Odyssey
North, are within the limits of the Malartic CHL Property where Abitibi
Royalties holds a 3% NSR. Any resource estimate for Odyssey North
released by the operators with their fourth quarter and year-end
financial results may differ from the actual Abitibi Royalties NSR
interest due to the location of the Malartic CHL Property boundary.
The Company also wishes to clarify the section numbers for
two drill holes in its September 12, 2016 news release. Hole ODY16-5056
section number is 718000E (previously stated as 718800E) and hole
ODY-16-5058 section number is 717800E (previously stated as 718800E).
Update on Barnat Extension and Jeffrey Deposits (3% NSR)
The Company holds a 3% NSR on the eastern portion of the
Barnat Extension (Barnat East) and the Jeffrey gold deposit, both of
which were included in the submitted Environmental Impact Assessment
("EIA") Project Notification Form. The formal EIA was submitted in
February 2015 and is pending final approval.
Agnico Eagle states in its Q3-2016 News Release, "Following
the Québec Bureau des Audiences Publiques sur l'Environnement ("BAPE")
public hearings in June and July 2016, permitting of the Canadian
Malartic extension project and Highway 117 deviation reached an
important milestone with the issue of the BAPE report on October 5,
2016. The report concluded that the project is acceptable and provides
several recommendations intended to enhance social acceptability. The
next step is for the Ministère du Développement durable, de
l'Environnement et de la Lutte contre les changements climatiques to
review the report and present their decision to Cabinet for approval. No
date for the approval has been set, but the Partnership anticipates
that this may occur in the first half of 2017."
Based on current estimates, cash flow from the Jeffrey Zone
in 2017 has been estimated by the Company at approximately Cdn$430,000
and for the Jeffrey and/Barnat Extension Zones in 2018 at approximately
Cdn$1.85 million based on information provided by Agnico Eagle and
Yamana (Abitibi Royalties News Release March 29, 2016) and a gold price
of US$1,270 per ounce (1.34 CDN:USD Exchange Rate). No production
details have been provided by the mine operators beyond 2018.
QUALIFIED PERSON
Glenn J. Mullan, Chairman, is the Qualified Person (as that
term is defined in National Instrument 43-101 - Standards of Disclosure
for Mineral Projects) who has reviewed this news release which is based
on and derived from information contained in Agnico Eagle's Q3-2016 News
Release (October 26, 2016), Agnico Eagle's Q3-2016 Results Conference
Call (October 27, 2016), Agnico Eagle's Exploration News Release (July
27, 2016), Agnico Eagle's Denver Gold Forum Corporate Presentation
Webcast (September 29, 2016), Yamana's Q3-2016 News Release (October 27,
2016), Yamana's Q3-2016 Results Conference Call (October 28, 2016),
Yamana's Denver Gold Forum Corporate Presentation Webcast (September 20,
2016) and Q2-2016 Results Conference Call Presentation (July 29, 2016).
About Abitibi Royalties
Abitibi Royalties holds a 3% NSR on the Odyssey North
discovery, Jeffrey Zone and the eastern portion of the Barnat Extension,
located inside the Malartic CHL property and a 2% NSR on portions of
the Gouldie and Charlie zones all at the Canadian Malartic mine near
Val-d'Or, Québec. In addition, the Company is building a portfolio of
royalties on early stage properties near producing mines. The Company
owns common shares in Yamana Gold and Agnico Eagle Mines (market value),
plus cash (as of June 30, 2016) of approximately Cdn$47.1 million. The
Company is debt free.
Golden Valley Mines Ltd. and Rob McEwen hold approximately 49.4% and 12.3% interest in Abitibi Royalties, respectively.
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