XST Confirms New High-Grade Gold System Near Cariboo With Open Pit Potential

• Osisko Gold confirmed a new high-grade gold mineralized system at its Proserpine target, expanding the footprint to 1km by 500m.
• Initial drilling results indicate potential for open-pit mining methods near the permitted Cariboo Gold Project in British Columbia.
• The company plans 26,500 additional meters of drilling to test the expanded target area and increase resource density.
• Analysts highlight the scale of the discovery while noting persistent financial headwinds and cash burn risks for the stock.

Osisko Gold Group Inc. has reported initial diamond drilling results from the Proserpine regional greenfield target, located approximately seven kilometers southeast of its permitted Cariboo Gold deposit in central British Columbia (Proserpine regional greenfield target). The exploration program, which completed 6,463 meters across 14 drill holes between February and May 2026, has confirmed a significant emerging gold mineralized system. These findings are particularly notable as they suggest potential for bulk mining or open-pit operations in close proximity to the company's primary underground development project.

The drilling program successfully expanded the known mineralized footprint at Proserpine to roughly one kilometer along strike by half a kilometer in width. Gold mineralization was encountered from near-surface depths to beyond 400 meters, with the system remaining open in all directions . This extensive depth and lateral continuity underscore the prospect of a sizeable new gold system that could complement the planned underground operations at Cariboo .

How does the Proserpine discovery impact the Cariboo project strategy?

The confirmation of high-grade gold structures alongside broader lower-grade zones at Proserpine presents a unique strategic opportunity for Osisko Gold . The geological characteristics observed suggest that the target may support future open-pit mining methods, which could significantly alter the long-term production profile of the broader Cariboo property . This dual potential for both high-grade underground-style mineralization and bulk open-pit mining expands the resource base and extends the potential mine life of the project .

Cariboo remains Osisko’s main development project, featuring a permitted underground mine and processing complex . Construction work has been advancing while underground drilling continues to refine the mine plan and test extensions to mineralization beyond the current reserve base . Recent deep drilling at Cariboo has extended gold mineralization below 700 meters vertical depth, reinforcing the project’s long-term growth potential . A 2025 feasibility study for Cariboo envisions a scalable underground operation expected to produce about 1.89 million ounces of gold over a 10-year life .

The proximity of the Proserpine target to the permitted Cariboo infrastructure allows for potential synergies in processing and logistics . By identifying a new system that could support open-pit mining, Osisko is effectively diversifying its mining method strategy within the same regional property . This approach could provide greater flexibility in responding to market conditions and commodity price fluctuations .

What are the financial and operational implications for investors?

In response to these positive geological results, Osisko has resumed drilling operations with three rigs . The company plans to complete a further 26,500 meters of drilling to increase drill density at Proserpine Southeast and begin first-pass drilling at Proserpine Northwest . This aggressive expansion of the exploration campaign reflects management’s confidence in the target’s potential to host a significant new gold system .

From an investment perspective, the stock has shown volatility following the announcement. Osisko Gold jumped 12.2% to $3.83 in Toronto trading, valuing the company at approximately $1.2 billion CAD . However, analysts note that technical factors, including a clear downtrend and weak momentum, present near-term headwinds .

Fundamentally, the company faces challenges related to persistent losses and heavy cash burn, which imply ongoing funding needs . These financial pressures have led some AI analyst models to rate the stock as Neutral, despite a Buy rating from human analysts with a C$10.00 price target . While the geological results at Proserpine are undeniably positive, investors must weigh the exploration upside against the company’s current financial obligations .

National Bank Financial mining analyst Don DeMarco noted that while exceptional grades are noteworthy, the more important takeaway is the scale . Drilling has defined mineralization over only a small portion of a much larger target that remains open in all directions . This suggests that the current resource estimates are likely conservative and that further drilling could significantly increase the identified mineralization .

The combination of high-grade intercepts and broader low-grade zones provides a robust foundation for future resource definition . As Osisko continues to test the expanded footprint, the potential for a significant addition to the Cariboo property’s resource base remains a key catalyst for the company . The ongoing drilling program will be critical in determining the economic viability of the Proserpine target .

Osisko Gold Group Inc. is a Canadian gold mining and exploration company listed on the NYSE and TSXV, focusing on advancing its 100%-owned, permitted Cariboo Gold Project . The company targets both high-grade underground-style mineralization and potential open-pit, bulk mining opportunities within the broader Cariboo Gold Project property . The Proserpine discovery reinforces the company’s strategy of identifying high-potential regional targets to support its main development project .