Site visit: O3 Mining preps to be new node in Val-d’Or ‘circular economy’

The circular nature of the industry finds old sites with new deposits ready to be cycled back into production, as workers migrate from spent operations to new projects.

If it enters production, Marban would join one of Canada’s most prolific gold producing camps, where mining is a major regional employer and the industry is supported with abundant infrastructure, power, and an experienced workforce.

O3 is fortunate in that 95% of its employees live in Val-d’Or, Vizquerra says.

Producing mines in the area include Agnico Eagle Mines’ (TSX: AEM) Goldex and Canadian Malartic mine, Wesdome Gold Mines’ (TSX: WDO) Kiena mine and Eldorado Gold’s (TSX: ELD) Lamaque mine.

Adding ounces to study

With a market value of $117.2 million, O3 is looking to put out a feasibility study for Marban next year, and with more resources to add after its prefeasibility was published in September 2022. It outlined a project that could produce 161,000 oz. of gold per year over a 10-year life.

O3 plans to drill 33,000 metres next year, mostly at Malartic H, the northwesternmost target in the Marban Alliance. The first resource for Malartic H, published in June, reported it hosts 10.2 million tonnes grading 1.04 grams gold per tonne for 342,000 oz. of gold, based on about 29,000 metres of drilling in 103 holes. The company hopes the inferred ounces can be converted to indicated in the feasibility study, potentially adding more than 200,000 oz. of gold to the mine plan.

The prefeasibility outlined combined open pit and underground resources of 67.6 million indicated tonnes grading 1.09 grams gold for 2.3 million oz., and 3.1 million inferred tonnes at 2.21 grams gold for 223,000 ounces.

In a base case scenario of gold prices at US$1,700 per oz., the post-tax net present value (at a 5% discount rate) comes to $463 million and the internal rate of return is 23.2% with a 3.5-year payback period.  

The feasibility will also incorporate 3,500 metres drilled at the Norlartic Extension from the fourth quarter which O3 plans to convert from inferred to indicated, possibly adding 10,000 oz. of gold to the mine plan.

That drilling was done just north of Marban Gold Mines’ namesake project that operated from 1961 until 1974 and produced 330,000 oz. of gold. Today the shaft is sealed and taped off . It sits off a quiet road that leads further north to ABF Mines’ mining equipment service shop. Nearby is a green shack housing a former shaft where, from 1959 until 1966, Norlartic Mines harvested 209,000 oz. of gold.

Toll mill for the win

When it comes to Marban Alliance’s capital costs – pegged at $435 million – that’s where Vizquerra says the project’s magic could happen, because if O3 can find a facility in the region to process 6 million tonnes per year, it could cut its capex in half.  

“That makes this project even more interesting,” Vizquerra said. “I’ve been very vocal in saying it is time for mining companies to work together. The message from a social standpoint of view and from an environmental standpoint of view will be exceptional.”

O3’s focus on sustainability also helped it win the Prospectors and Developers Association of Canada’s 2024 Sustainable Development Award on Nov. 1, as well as Ecologo certification from sustainability services company UL Solutions for O3’s efforts to reduce its environmental footprint. 

Vizquerra returns to his concept of a circular economy that he says exists in the mining-intensive region. He mentions that the Marban targets sit just 12 km east of Canadian Malartic mine, the second-largest operating gold mine in Canada by output. Agnico says that project will operate until 2029.

“We will start production hopefully by 2027. Canadian Malartic will be running out of ore at that particular time as well. That’s something that everyone knows,” he says. “Those people who work in the open pit can go from there to work with us. We will maintain the economy of the area, which to me is extremely important.”

$10M investment

On the financial front, Moneta Gold (TSX: ME; US-OTC: MEAUF) holds 20.4% of O3’s equity and Cartier Resources (TSXV: ECR) holds 14.2%, for a total of $24.5 million.

Its cash balance is $10.1 million as of early November including $10 million received from a strategic investor in June which O3 plans to use for its feasibility study.

“That clearly shows there’s interest for the quality of the project we have, although due to legalities we aren’t allowed to say who it is,” Vizquerra said.

“But you might say that based on the different players in Val-d’Or, it could be Eldorado or Wesdome or Agnico. In my view, I don’t think someone from outside of Val-d’Or would come for less than 3 million ounces. Someone from outside Val-d’Or would come for something much bigger.”

Smooth relations

If O3’s project goes into production, the entire area from the former Marban to the Norlartic shafts will become an open pit. ABF and some of the local homes would have to move. Vizquerra said O3 has started the consultation process with members of the community.

“We’re working on a plan that will be the same for everyone so there are no discrepancies. They’ll give homeowners the same evaluation for their homes,” he said.

While O3 is still years away from production, it began its community engagement in 2021. It conducted hundreds of one-on-one meetings in 2022 with residents and Indigenous people, and met with three of the four main First Nations groups interested in the project.

Provincial and federal agencies held public consultations on the Marban project starting last year.  . The company intends to file environmental impact studies near year.

Court ruling confounds

However, Ottawa’s approval has been put on hold after the Supreme Court ruled on Oct. 13 that the federal Impact Assessment Act is unconstitutional, said Myrzah Bello, O3’s vice-president of ustainable development and human resources.

“We’re kind of in a limbo now of not knowing what we will be doing,” she said. “e don’t know what’s going to happen federally, but we do know that we will have some federal jurisdiction obligations.”

Vizquerra admits that bump in the road makes him a little nervous, despite his general optimism.

“Not having clarity right now makes me a little uncomfortable, however I don’t have any doubts that the moment we’ll have to go through the actual permitting this will be resolved.”