February 2011

Fast-tracking to production

By Peter Diekmeyer

Project development at Osisko’s property near Malartic, Quebec began in 2008. The mine is scheduled to begin production in the second quarter of 2011 | Photo courtesy of Osisko Mining

It takes a lot to get a large-scale mining operation going. But when skilled management, demand, financing arrangements and regulatory approval are aligned, the motivation to move quickly can be strong. That is particularly true of Osisko’s Canadian Malartic open pit mine, which is expected to start production in the second quarter of this year.

“With gold prices trading at near record highs, we are doing everything we can to move things along quickly,” says Paul Johnson, the company’s general manager of technical services for the project, which is located 20 kilometres west of Val-d’Or, in mining-friendly Quebec’s gold-rich Abitibi region. “But we are an experienced team, which together with the founders of Osisko, Sean Roosen, Robert Wares and John Burzynski, has many former Cambior executives, including CFO and vice-president finance Bryan Coates. We are used to working together under tough conditions.” Bought by IAMGOLD in 2006, Cambior operated mines in Quebec, the United States and South America, including the open pit Rosebel gold mine in Suriname, which the company brought into production in 2004.

So far, those old Cambior hands, Johnson among them, have been doing a pretty good job. According to company officials, the Canadian Malartic mine site construction, including administration facilities, a grinding area, a crusher and thickeners, an associated tailings area and a “green wall” that is being built to shelter the adjoining town from the site, have all progressed on schedule. Furthermore, the mining vehicle fleet is on site and preproduction activities are well underway.

A major turnaround

Osisko bills the $1 billion Canadian Malartic investment as Quebec’s largest existing private sector project. By 2012, this fully financed and permitted operation is expected to produce 688,000 ounces of gold. Average production will eventually move up to 732,000 ounces per year over the first five years, drawn from the 60,000 tonnes of ore that will be processed each day.

Osisko purchased the Canadian Malartic property when it became available following the bankruptcy of McWatters Mining in 2004. Two years later, the results of its drilling campaign earned Osisko executives the Prospectors of the Year award from the Association de l’Exploration Minière du Quebec, followed by the 2008 PDAC Prospectors of the Year award, several in a series of accolades for their work.

Canadian Malartic’s impressive ore body includes 8.97 million ounces of reserves and 7.7 million ounces of estimated recoverable gold. The ore will yield an average grade of 1.13 grams per tonne during the mine’s expected 12.2-year life. Close to 97 per cent of resources lie within 300 metres of the surface.

Doing it quickly

The project development phase began in early 2008 just as the exploration and permitting work was being wrapped up. “We worked using a critical path method,” says Johnson. “Instead of doing one thing at a time, we tried to do things concurrently, whenever possible, so that things got accomplished quicker.”

According to Luc Lessard, the company’s vice-president of engineering and construction, also a Cambior alumnus, the company had to make several key decisions early. “The first question was whether to develop the property ourselves or sell it,” says Lessard. “Once we agreed to go ahead on our own, we had to figure out whether we needed to hire a project management firm to oversee construction operations.”

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