Otso Gold

Short Runway to Gold Production in Finland

This Otso Gold Corp (TSXV:OTSO) profile is part of a paid investor education campaign*

Overview

Otso Gold Corp (TSXV:OTSO) is a gold company nearing production at its wholly-owned Otso Gold Mine in the premiere mining jurisdiction of Finland. The past operating mine complex, which includes the 2 million tonne per annum processing plant, is fully built, licensed, and permitted. The company is advancing through a four-phase redevelopment plan that is expected to end with a full restart to low-cost mining operations by mid-2020.

The redevelopment plan is focused on confirmatory geological work aimed at gaining a well-informed understanding of the mine areas in order to finalize a comprehensive mine plan. Otso Gold Corp understands that avoiding the mistakes of the previous operators and gaining a better understanding of the deposit’s geology are the keys to a successful restart at the Otso Gold Mine.

The mine’s Finland address places Otso Gold Corp within one of the world’s leading mining jurisdictions. In 2018, Forbes ranked Finland as the world’s second-best country for property rights while the Fraser Institute ranked Finland third-best in the world for mining policies, owing to the government’s high support of mineral exploration and production. Finland has a 20 percent corporate tax rate and gold producers pay a low royalty of 0.15 percent.

Gold consumers are increasingly demanding that companies in the downstream gold supply chain procure their gold from responsibly-mined sources. Otso Gold Corp takes an environmentally-conscious approach to its mining practices, including an energy mix with a significant percentage of wind power. At the Otso Gold Mine, the company is investigating installing wind turbines to generate renewable energy on-site.

Otso Gold Corp is led by Lionsbridge Capital, a resource industry firm with an excellent track record in building and redeveloping successful companies. Lionsbridge is a part of the Wesson Group of Companies, founded by Otso Gold Corp CEO Brian Wesson. A qualified mining engineer, Wesson’s mining industry career spans over 30 years in the construction, operation and management of natural resource operations globally.

Otso Gold Company Highlights

  • Short runway to production with redevelopment plan underway on a well-funded, fully-permitted and licensed past-producing mine.
  • Low-cost mining operation with two open pits and a two million tonne per annum processing plant.
  • Proven recoveries of 87.5 percent.
  • Production planned for July 2020.
  • Further exploration potential in the world-class mining jurisdiction of Finland.
  • Pioneering the use of sustainable energy in mining with an energy mix including wind power.
  • Managed by Lionsbridge which has an excellent track record in building and redeveloping successful companies.
  • Shareholders include management (10 percent), project vendors (30 percent), Canaccord nominees (30 percent) and Pandion Mine Finance (20 percent).

Bringing Finland’s Otso Gold Mine Back into Production

The fully-built Otso Gold Mine is located near the town of Raahe, Finland. The access to skilled labor and infrastructure in this established mining jurisdiction directly benefits the Otso Gold Mine. Infrastructure includes low-cost power on-site, a network of paved all-weather roads leading to the mine site, a seaport within twenty minutes and an airport within an hour of the mine site. The €250 million Otso Gold Mine operation includes two developed pits and a completely-built two million-tonne throughput process plant designed by Metso and Outotec.

The well-defined mineralized zone on the Otso Gold Mine is one of the largest gold resources in the region. Coffey Geotechnics Ltd, a Tetra Tech Company, completed an updated NI 43-101 Mineral Resource estimate for the property in September 2019 based on an improved understanding of the spatial continuity between samples collected from drill holes and a revised geological model. The drill results database includes 3,527 drill holes over 145,540 meters.

Otso Gold - NI 43-101 Sept 2019

*The materials remaining in the low-grade stockpile from previous production has been included in the measured category as it is ready to be fed to the mill at start-up. The sulphidic waste rock dump (potentially acid-forming) is included in the inferred category of the estimate as it is considered to be above the planned cut-off grade of 0.3 g/t Gold.

**See also NI 43-101 Technical Report with effective date 18 September, 2019 filed on www.sedar.com with the Company’s profile.

Mine and processing plant

The Otso Gold Mine operation consists of two open pits: the 50-meter-deep North Pit and the 25-meter deep South Pit. Otso Gold Corp’s mine plan emphasizes grade control and reconciliation. Conservative estimates for mining costs come in at €506 per gold ounce.

The plant has a proven operating recovery of 87.5 percent gold at a process cost of €305 per gold ounce. Having already operated in 2019, the processing plant is production-ready with minimal CAPEX required to return to production.

Phased redevelopment plan

Otso Gold Corp is working to bring the previously-operating mine back into production in 2020 through a four-phase redevelopment plan. The plan’s focus is on confirmatory geological work aimed at gaining an adequate understanding of the mine areas. The goal is to finalize a mine plan that will ensure ore is delivered to the process plant in sufficient quantities and grades. The company’s mandate includes increasing the confidence in the resource base and defining additional gold resources. In line with this mandate, infill drilling supported by Tetra Tech began in Q4 2019. The company expects to release a feasibility level restart technical report focused on mine planning in Q1 2020.

Phase One: Q4 2019, Q1 2020

  • Infill drilling program to adequately define mining areas in the southern extension of the North Pit and the northern extension of the South Pit.

Otso Gold Redevelopment Plan - Phase 1

Phase Two: Q2 2020

  • Mining of the southern extension of the North Pit and the northern extension of the South Pit.
  • Infill drilling of the South Pit and the eastern extension of the North Pit.
  • Preparation work for mining of the South Pit.

Otso Gold Redevelopment Plan - Phase 2

Phase Three: Q3 2020

  • Mining of the South Pit and southern extension of the North Pit.
  • Infill drilling of the North Pit.
  • Preparation work for mining of the North Pit.

Otso Gold Redevelopment Plan - Phase 3

Phase Four: Q4 2020

  • Mining of the North Pit and the South Pit, including extensions.
  • Exploration drilling of the northern extension of the North Pit.

Otso Gold Redevelopment Plan - Phase 4

Planning for the future

Otso Gold Corp has identified two targets for future exploration on the property: New Hope and Petrol Pump.

otso gold future potential

Otso Gold Corp is also working to permit a heap leach operation on site for processing lower-grade ore for higher recoveries, which could see an additional 20,000 ounces produced with minimal CAPEX or OPEX.

Otso Gold Heap Leach and CIL Resources Feed

In addition, Otso Gold company holds significant land in exploration leases regionally which have been previously drilled with promising results.

Otso Gold’s Management Team

Brian Wesson—President, CEO and Director

Brian Wesson has extensive experience spanning a career of over 30 years in the management, operation design and construction of natural resource operations globally. He qualified as an engineer in South Africa, gained an MBA in Australia, studied economics at the University of South Africa, is a fellow of the Australasian Institute of Mining and Metallurgy and a fellow of the Australian Institute of Company Directors. Wesson founded the Wesson Group of Companies, of which Lionsbridge and Westech form part, with a view to utilising the Groups’ experience in the ownership, management and development of natural resource companies and the intellectual property developed to unlock shareholder value. Wesson brings unique value in being highly experienced in both the corporate and technical aspects of managing a company; he understands natural resource companies from underground to the ‘board room’.

Clyde Wesson — Vice-President and Director

Clyde Wesson has significant experience in all aspects of the management of corporate entities, both listed and unlisted. His expertise includes the restructuring and recapitalizing of distressed assets, corporate finance, design and execution of corporate strategy, legal management and bringing assets to market. Wesson holds bachelor’s degrees in both Law and Commerce (LLB, B.Com) and is currently a candidate for a Master’s of Law (LLM) from Melbourne University (2019). He is a solicitor and member of the Supreme Court of NSW and a member of the Australian Institute of Company Directors, Australian Institute of Mining and Metallurgy and the Law Society of NSW.

Daryl Midgley — Chief Financial Officer

Daryl Midgley is an experienced CFO with over 20 years in the mining industry. He has experience in areas such as capital raises for major projects, initial public offerings, reverse takeovers, financial reporting systems, profit and loss reporting, and both financial strategy and long term budgetary oversight. Midgley previously worked as a Manager in BDO’s Mining and Energy Audit team. He has worked with a number of listed companies with operations around the globe.

Yvette Harrison —Director

Yvette Harrison is a Chartered Professional Accountant, CGA with over 20 years of experience in permanent positions as well as in bridge leadership consulting roles with organizations in “immediate-need” situations in mining, real estate investments, technology, forest products, manufacturing and not-for-profit. She worked as Chief Financial Officer, VP Finance, Director Finance, Controller and Consultant with numerous public and private companies as well as not-for-profits. She also worked in public practice.

Amelia Wesson —Human Resources and Stakeholders

Amelia is a principal of Lionsbridge and Westech International and has gained experience turning companies around and being Vice President and a board member of listed Canadian companies. Negotiating agreements with governments, unions and land owners in several companies and working closely with communities to ensure sustainability. Amelia is focused on managing human resource assets and local community relations.

Scott Salisbury — Executive Operations Manager

Scott Salisbury has over 25 years experience in the mining industry, spanning various commodities and operations in Australia, Africa and Central Asia. He has expertise in senior management, mining, mineral engineering and operations, ERP role outs, feasibility studies and the construction and commissioning of several green field projects in iron ore and gold. He qualified as a Mechanical engineer in Australia and has worked for a number of Blue-chip mining companies and held senior management roles with several junior mining companies including COO of Chaarat Gold in the Kyrgyz Republic, Construction Manager of the Tasiast Gold Mine in Mauritania, Project Manager for the Tala Hamza zinc lead project in Algeria and senior operational roles at the Martabe gold mine in Indonesia.

Peter Gilligan — Mine Manager

Peter Gilligan has in excess of thirty years operational and managerial experience in open pit and underground mining in both metalliferous and coal mines. Further, Gilligan has in excess of twenty years planning experience in open pit and underground mines. He has particular expertise in resource development, construction and change management of existing mining operations. He graduated with honours from the Royal School of Mines and subsequently completed an MBA.


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