THE CARIBOO GOLD PROJECT

Project Description

Osisko Development, through its 100%-owned subsidiary Barkerville Gold Mines Ltd., is proposing to construct and operate the Cariboo Gold Project, an underground gold mine and associated infrastructure and activities, in the historic Cariboo Mining District in east-central BC, east and southeast of the City of Quesnel. Osisko is a Canadian company based in Wells, BC and headquartered in Montreal, Canada.

The Project is subject to review under the BC Environmental Assessment Act, 2018 (BCEAA, 2018) and the review will be led by the British Columbia Environmental Assessment Office. The Project entered the review process in fall of 2019 and has an accepted Project Description and Section 10 order under the BC Environmental Assessment Act, 2002 (BCEAA, 2002). This Project Description has also been accepted as fulfilling the requirements of the Initial Project Description for the BCEAA and the Project is now entering the Early Engagement Phase. The Project is not subject to review under the Federal Impact Assessment Act.

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Project’s Mineral Reserves and Resources

The QPs have classified the 2022 MRE as Measured, Indicated, and Inferred mineral resources based on data density, search ellipse criteria, drill hole density, and interpolation parameters. The 2022 MRE is considered to be reliable and based on quality data and geological knowledge. The mineral resource estimate follow 2014 CIM Definition Standards on Mineral Resources and Reserves.

The table below displays the results of the 2022 MRE for the Project at the official 2.0 g/t Au cut-off grade for all eight deposits: Cow, Valley, Shaft, Mosquito, KL, Lowhee, BC Vein and Bonanza Ledge.

The reported quantities and grade estimates at different cut-off grades are presented for the sole purpose of demonstrating the sensitivity of the mineral resource model to the selection of a reporting cut-off grade.

Cariboo Gold Project 2022 Mineral Resource Estimate reported at a 2.0 g/t Au cut-off grade (except for Bonanza Ledge; reported at a 3.5 g/t Au cut-off grade)

Category Deposit Tonnes Grade Ounces
000 (Au g/t) 000
Measured Bonanza Ledge 47 5.1 8
Indicated Bonanza Ledge 32 4.0 4
BC Vein 1,030 3.1 103
KL 389 3.2 40
Lowhee 1,621 3.6 188
Mosquito 1,795 4.3 249
Shaft 11,139 4.3 1,531
Valley 4,403 3.8 536
Cow 6,645 3.8 811
Total Measured Resources 47 5.1 8
Total Indicated Mineral Resources 27,055 4.0 3,463
Inferred BC Vein 461 3.5 53
KL 1,905 2.8 168
Lowhee 520 3.5 59
Mosquito 1,262 3.6 146
Shaft 5,730 3.9 725
Valley 2,135 3.4 235
Cow 2,394 3.1 236
Total Measured and Indicated Mineral Resources 27,102 4.0 3,470
Total Inferred Mineral Resources 14,407 3.5 1,621

 

Mineral Resource Estimate notes:

  1. The independent and qualified persons for the Mineral Resource Estimates, as defined by NI 43-101, are Carl Pelletier, P.Geo., and Vincent Nadeau Benoit, P.Geo. (InnovExplo Inc.). The effective date of the 2022 Mineral Resource Estimate is May 17, 2022.
  2. These mineral resources are not mineral reserves as they do not have demonstrated economic viability.
  3. The Mineral Resource Estimate conforms to the 2014 CIM Definition Standards on Mineral Resources and Reserves and follows the 2019 CIM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines.
  4. A total of 471 vein zones were modelled for the Cow Mountain (Cow and Valley), Island Mountain (Shaft and Mosquito), Barkerville Mountain (BC Vein, KL, and Lowhee) deposits and one gold zone for Bonanza Ledge. A minimum true thickness of 2.0 m was applied, using the grade of the adjacent material when assayed or a value of zero when not assayed.
  5. The estimate is reported for a potential underground scenario at a cut-off grade of 2.0 g/t Au, except for Bonanza Ledge at a cut-off grade of 3.5 g/t Au. The cut-off grade for the Cow, Valley, Shaft, Mosquito, BC Vein, KL, and Lowhee deposits was calculated using a gold price of USD1,600 per ounce; a USD/CAD exchange rate of 1.30; a global mining cost of $50.41/t; a processing & transport cost of $30.41/t; and a G&A + Environmental cost of $16.18/t. The cut-off grade for the Bonanza Ledge deposit was calculated using a gold price of USD1,600 per ounce; a USD/CAD exchange rate of 1.30; a global mining cost of $79.13/t; a processing & transport cost of $60.00/t; and a G&A + Environmental cost of $51.65/t. The cutoff grades should be re-evaluated in light of future prevailing market conditions (metal prices, exchange rate, mining cost, etc.).
  6. Density values for Cow, Shaft, and BC Vein were estimated using the ID2 interpolation method, with a value applied for the non-estimated blocks of 2.80 g/cm3 for Cow, 2.79 g/cm3 for Shaft, and 2.69 g/cm3 for BC Vein. Median densities were applied for Valley (2.81 g/cm3), Mosquito (2.79 g/cm3), KL (2.81 g/cm3) and Lowhee (2.75 g/cm3). A density of 3.20 g/cm3 was applied for Bonanza Ledge.
  7. A four-step capping procedure was applied to composited data for Cow (3.0 m), Valley (1.5 m), Shaft (2.0 m), Mosquito (2.5 m), BC Vein (2.0 m), KL (1.75 m), and Lowhee (1.5 m). Restricted search ellipsoids ranged from 7 to 50 g/t Au at four different distances ranging from 25 m to 250 m for each deposit. High grades at Bonanza Ledge were capped at 70 g/t Au on 2.0 m composited data.
  8. The mineral resources for the Cow, Valley, Shaft, Mosquito, BC Vein, KL, and Lowhee vein zones were estimated using Datamine Studio TM RM 1.9 software using hard boundaries on composited assays. The OK method was used to interpolate a sub-blocked model (parent block size = 5 m x 5 m x 5 m). Mineral resources for Bonanza Ledge were estimated using GEOVIA GEMS TM 6.7 software using hard boundaries on composited assays. The OK method was used to interpolate a block model (block size = 2 m x 2 m x 5 m).
  9. Results are presented in situ. Ounce (troy) = metric tons x grade / 31.10348. Calculations used metric units (metres, tonnes, g/t). The number of tonnes was rounded to the nearest thousand. Any discrepancies in the totals are due to rounding effects. Rounding followed the recommendations as per NI 43-101.
  10. The qualified persons responsible for this section of the technical report are not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political or other relevant factors that could materially affect the mineral resource estimate.

The vein corridors comprising the Cariboo resource estimate are modelled to an average depth of 350 meters, exploration drilling has intersected mineralization at depths below 700 meters from surface. The Resulting Issuer will continue with the systematic exploration to further define and expand the known zones and develop greenfield targets on the remaining land package. The Resulting Issuer intends to drill from underground infrastructure once permitting and construction of an exploration drift is complete. The robust 3D litho-structural model that defines the controls of mineralization allows the exploration team to define additional mineral resource much more efficiently, with a high hit rate (80% of the drill holes intersect potentially economic mineralization), lowering the cost per discoverable ounce. This model can be applied to the remaining 65 kilometers of strike.

In accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”), an updated technical report for the Cariboo will be filed on SEDAR (www.sedar.com) under Osisko Royalties’ issuer profile and, in due course, the Resulting Issuer’s issuer profile.

The Company cautions that the decision to undertake test mining at Bonanza Ledge II has been taken without the benefit of a feasibility study of mineral reserves, demonstrating economic and technical viability, and, as a result there may be increased uncertainty of achieving any particular level of recovery of material or the cost of such recovery. The Company cautions that historically, such projects have a much higher risk of economic and technical failure. There is no guarantee that production will continue as anticipated or at all or that anticipated production  costs will be achieved.  The failure to continue production would have a material adverse impact on the Company’s ability to generate revenue and cash flow to fund operations.  Failure to achieve the anticipated production costs would have a material adverse impact on the Company’s cash flow and potential profitability.  In continuing current operations at Bonanza Ledge II, as contemplated, the Company will not be basing its decision to continue such operations on a feasibility study of mineral reserves demonstrating economic and technical viability.

Technical Report

NI 43-101 Technical Report – Preliminary Economic Assessment for the Cariboo Gold Project

May 24, 2022

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