Pine Point zinc mine project picked up by junior mining company with major backing

Pine Point, N.W.T., mine property attracts friendly takeover by Osisko Metals Inc. in transaction valued at $34 million.

Osisko Metals announced friendly takeover worth $34M on Dec. 16

Core samples left behind from the days of Cominco's operations in Pine Point, N.W.T. Junior mining company Osisko Metals Inc. has obtained 100 per cent ownership of the project. (Jimmy Thomson/CBC)

Osisko Metals Inc. announced a friendly takeover of the Pine Point zinc mine project near Hay River, N.W.T., on Dec. 16.

The all-share transaction is worth approximately $34 million. It offers existing Pine Point Mining Ltd. shareholders a premium of up to 27 per cent on existing stock value, and gives Osisko Metals ownership of the Pine Point Project.

Osisko Metals is a Canadian junior exploration company backed by Osisko Mining Inc. and Osisko Gold Royalties Ltd.

Pine Point Mining president, Jamie Levy, says Osisko Metals brings the money and expertise needed to move the project forward.

For Osisko Metals, the location has a strong upside with ready access to a railway, highways and electricity.

Jeff Hussey, president and CEO of Osisko Metals Inc., has aggressive plans to develop the Pint Point zinc property. (Osisko Metals Inc.)

"We were scouring the base metal sector looking for assets that needed capital and technical expertise," said Jeff Hussey, president and CEO of Osisko Metals. "We're an exploration and development company; we want to do both at Pine Point."

The original Pine Point mine went out of production in the late 1980s, leaving many mineral deposits identified but untapped.

Of the approximately 100 deposits identified on the 2,300 hectare property, Hussey said approximately 46 remain unmined. Historical mineral assay data exists for many of the remaining deposits, but only 10 have been brought up to modern technical reporting standards, leaving 36 in need of re-evaluation.

"We can't take historical data per se," Hussey said. "We have to go in, re-drill the assay and compare to previous data. If they're within an acceptable margin we can use the historic data, if not we have to re-drill completely."

Hussey said the company wants to bring those 36 deposits up to modern NI 43-101 technical standards: "We want to see, what does Pine Point have to offer?"

A map of the former Pine Point mine east of Hay River, N.W.T. (Submitted by Darnley Bay Resources Ltd.)

Hussey said Osisko Metals has the financial backing and access to technical expertise needed to begin a "very aggressive exploration and development plan" at Pine Point. But the details of that plan won't be laid out until some time in 2018, after the deal announced on Dec. 16 is finalized.

Hay River Mayor Brad Mapes is encouraged to see a mining company with Osisko Metals's backing take up a project so near town.

"I think it's great news for our town," Mapes said. "Our town is looking forward to seeing this project move forward to create the economy that's needed for this town to grow."

With files from Marilyn Robak