Analysts attack Osisko’s Cariboo gold project feasibility 

The first phase of Osisko Development’s (TSXV: ODV; NYSE: ODV) Cariboo gold project in central British Columbia makes little economic sense, say analysts about a new feasibility study.

The project’s underground mine would produce 1.87 million oz. over a 12-year life after construction costs of $137.3 million, the Montreal-based company proposes in the study released on Tuesday.

A three-year first phase would process 1,500 tonnes a day from the Lowhee, Shaft and Mosquito deposits for average annual production of 72,500 ounces. The plant would increase capacity to 4,900 tonnes a day in the fourth year to produce 193,798 oz. per year, the study shows.

However, total cash costs for the first phase are US$1,149 per oz., according to the study and it uses a base case gold market price of US$1,700 per ounce. That amounts to earnings of US$113.2 million, only about a third of the projected phase two capital cost.

“They’ll need to raise another $300M before the larger, second stage is built,” industry blogger Mark Turner wrote on his IKN site late Tuesday. “There’s no point in getting involved before 2027,” he advised investors.