A news release entitled “Osisko Outlines Gold Potential at Malartic” on September 8 caught my attention, for the wrong reasons. Couched in cautious language, it talked about gold potential at OSISKO EXPLORATION LTD.’s Canadian Malartic property, 20 km west of Val d’Or, Que.
I am convinced that any property in the Kirkland Lake Rouyn-Noranda Malartic Val d’Or corridor, i.e., the Abitibi greenstone belt of Ontario and Quebec, has the potential to host gold, although not all of them do. What bothered me about this report was that it named a “potential resource” figure3.2 to 4.3 million ounces of goldbased on data compilation of past work done on the property. It followed this with the cautionary sentence, “The potential quantities and grades reported above are conceptual in nature and there has been insufficient work to date to define a NI 43-101 compliant mineral resource on the property.”
As a former field geologist, I can well imagine poring over maps and logs and reports from a property, putting all that data into a model based on a number of “what if’s”, and coming up with a range of numbers, a ballpark, “conceptual” resource. Today that process may be done a lot faster than when I was working, without the aid of computers, in the 1970s and early 1980s.
There’s another big change since those daysthe effects of the 1996-7 Bre-X fraud and the subsequent requirement to define mineral resources in compliance with National Instrument 43-101. This new criterion was meant to protect potential investors from fraud, but it also protects mineral companies. They are forced to use the kind of stringent methodology that the best companies have always used, before they can state they have defined resources or reserves. The result is that companies are a lot more certain of their assets; there is less wiggle room for flighty promoters.
In the bad old days of the late 1980s and the mid-1990s when there was too much money available for exploration and not enough accountability, many juniors wanted to claim potential ounces on their propertiesthe more the better. But I like to think that, when I read a news release these days, if I see a million ounces of gold mentioned, then this is a very promising, advanced-stage exploration play. Even the cautionary language that the Osisko release used does not distract my eye from the main point of the releasemany millions of ounces of gold.
I would suggest that companies should not publish “conceptual” numbers like this. Such figures are a necessary and an exciting part of the work that goes on in the exploration office, but they are premature for release to the investing public.
If you want to find out more about this play you can contact Robert Wares, president of Osisko Exploration at (514) 735-7131 or visit www.osisko.com.