Research Note - Osino Resources Corp (OSI:TSXV,$0.83|BUY $3.40 TARGET) Drill Program Complete - Resource Update & PFS in Q3
This morning, OSI announced drill assays results and provided an update on the progress for the Pre-Feasibility Study (PFS) at the Twin Hills Project in Namibia. The resource conversion drill program is now complete, and the Company is working to compile a new Mineral Resource Estimate that will be used in the upcoming PFS. The results reported today exceeded expectations by significantly extending the mineralized envelopes, discovered new areas of mineralization and intercepted several new high-grade shoots. We are maintaining our BUY rating and our 12-month target price to $3.40/share for OSI.
The Company drilled 34,000m of infill drilling and 6,900m of step-out drilling this year, roughly half of which has been drilled since the April MRE. The latest drilling has showed the Company is homing in on a few higher-grade zones at both Twin Hills Central and Clouds West. Highlights include:
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6.87 g/t Au over 12m (68-80m) including 78.70 g/t Au over 1m (Twin Hills Central Step-out)
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4.50 g/t Au over 15m (16-24m) (Clouds West Infill)
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1.00 g/t Au over 72m (302-374m) including 1.59 g/t Au over 30m (Clouds Step-out)
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3.77 g/t Au over 8m (252-260m) (Twin Hills West Infill)
We are pleased with the results and look forward to the MRE coming within the next month. The Company currently has a 2.73 Moz resource with 620 Koz in the inferred category. In the upcoming resource update, we expect the majority of the 620 Koz inferred resource to be upgraded into the indicated category while also adding an additional 100-200 Koz in the inferred category based on the successful expansion drilling campaign this year. Additionally, we see strong potential for the average grade to increase by 5-10%.
Pre-Feasibility Study Progress Update:
The Company provided an update on progress for the PFS and the major studies that will be included in the report. All studies are progressing well, and everything is on track to be completed by late August. The studies include:
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Geotechnical drilling – 13 bore holes across the three pits have been drilled and are being analyzed
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Pit optimization with new geotechnical understanding
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Metallurgical test work – 50 samples from different locations being analyzed
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Power Purchase Agreement (PPA) – Discussions are underway with Namibia’s power utility (Nampower Ltd.)
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Water supply and requirement studies and supply strategy options
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Stakeholder engagement