O3 MINING

O3 Mining Inc. (TSXV:OIII) is a larger junior gold explorer with a market cap of CAD $142 million. Their portfolio of assets in the provinces of Quebec and Ontario, Canada, two of the better mining jurisdictions anywhere, span more than 460,000 hectares.

As part of the Osisko Group of companies, O3 is consolidating exploration properties, aiming to become a multi-million ounce high-growth company. In Quebec, the 4th most attractive mining jurisdiction on the planet, O3 controls 61,000 hectares in historically productive Val d’Or and over 50 kilometers of strike length on the Cadillac-Larder Lake fault.

Val d’Or, a district responsible for producing over 30M oz. of gold, holds O3’s flagship Marban project on the Malartic Property, representing 75% of the company’s total resources at 2.5 M gold ounces. That’s up by 40% since the 2016 resource estimate. More than 600,000 meters have already been drilled, with over $60 M invested in the ground. A large 40,000 meter drill program is ongoing to extend the deposit. There is a lot of brownfield upside potential.

Source: September 2020 company presentation

A positive Preliminary Economic Assessment was just delivered on Marban, boasting an after-tax NPV of $423M, after-tax IRR of 25.2%, a 4-year payback and 15 year mine life. The average cost to produce the gold will be a respectable $822 per ounce, offering nice margins.

With a huge overall 150,000 meter drill program on its Cadillac Break properties, O3 continues to advance this highly prospective district by using AI technology to help identify drill targets.

In Ontario, the Golden Bear Group of properties includes the Garrison project which hosts 2M oz. gold in three main zones. It’s a potential consolidation play as bigger neighbors include Kirkland Lake, Pan American and Moneta Porcupine, some with established deposits of multiple millions of ounces.

As a consolidator/developer/explorer, O3 doesn’t hesitate to joint venture or sell off properties it deems non-core. This allows it to unlock value, while retaining participation in the case of JVs.

Junior gold explorers come in all sizes and varieties. Given their nature of high risk, it makes sense to build a portfolio of at least 5 names. It’s also wise to allocate small amounts and to add to positions over time.

But the moon-shot potential is undeniable, especially in a secular gold bull market that’s starting to heat up