Northern Miner write up: Wellgreen Platinum's resource update sets stage for PEA
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2014-07-24
VANCOUVER — It's been a busy couple of years for explorer Wellgreen Platinum (TSXV: WG; US-OTC: WGPLF) as it moves its wholly-owned Wellgreen polymetallic deposit along the road to development. The company has been pushing to complete an updated preliminary economic assessment (PEA) on the project, and on July 24 it reached a major milestone in the form of Wellgreen’s first new resource estimate in over two years.
Wellgreen is a unique deposit insomuch as it represents a sizeable platinum group metals (PGM) discovery outside of South Africa that also hosts nickel, copper, and cobalt mineralization. The property has been explored as far back as the 1950s and, as such, has a significant drill history that totals around 231,000 metres. The company's updated resource incorporates a large degree of historic core re-assaying along with new drilling conducted since 2012, which jointly include nearly 40,000 metres.
Wellgreen consists of disseminated to semi-massive and massive sulphide layers within the Quill Creek Ultramafic complex. The deposit is defined by 760 drill holes which have tested roughly 2.5 km of a system that runs for around 20 km. Wellgreen averages 100 to 200 metres in thickness at surface in the Far West zone, expands to 500 metres in thickness in the Central zone and to nearly a kilometre wide in the Far East zone, where the deposit remains open down dip and along strike.
And Wellgreen's work has resulted in a major boost in global resources at the project, as well as a new model that has increased confidence in the company's ability to convert large-scale inferred resources into the indicated category.
Measured-and-indicated resources at Wellgreen now total 330 million tonnes grading 0.24 gram platinum per tonne, 0.24 gram palladium per tonne, 0.045 gram gold per tonne, 0.26% nickel, 0.14% copper, and 0.015% cobalt at a 0.57 gram platinum equivalent cut-off grade. Meanwhile, inferred resources have nearly doubled to 846 million tonnes grading 0.23 gram platinum, 0.23 gram palladium, 0.047 gram gold, 0.24% nickel, 0.14% copper, and 0.015% cobalt.
The company also defined in-pit resources at higher grades based on a 1.9 grams platinum equivalent cut-off that total 72 million measured-and-indicated tonnes grading 0.455 gram platinum, 0.37 gram palladium, 0.09 gram gold, 0.33% nickel, 0.29% copper, and 0.019% cobalt. The higher-grade material also includes 174 million inferred tonnes averaging 0.46 gram platinum, 0.35 gram palladium, 0.098 gram gold, 0.31% nickel, 0.3% copper, and 0.018% cobalt.
In comparison, Wellgreen's 2012 PEA was based on in-pit resources of 14 million indicated tonnes grading 0.99 gram platinum, 0.73 gram palladium, 0.5 gram gold, 0.68% nickel, 0.62% copper, and 0.05% cobalt. Inferred resources tacked on 446 million tonnes of 0.38 gram platinum, 0.33 gram palladium, 0.6% nickel, 0.25% copper, and 0.02% cobalt.
President and CEO Greg Johnson noted in the release that the updated resource makes Wellgreen one of the "largest undeveloped PGM resources" with over 5.5 million oz. of 3E (platinum, palladium, and gold) in the measured-and-indicated category and around 14 million oz. of 3E in the inferred category.
“The new [estimate] is an important component for completion of the updated PEA, and will be followed by the conclusion of the metallurgical program and engineering, which we expect to complete over the next two months," Johnson added. "With the successful closing of our equity financing in June the metallurgical and engineering programs are progressing well."
On June 24 the company closed a $6.9 million bought-deal financing led by Dundee Securities, Edgecrest Capital, Haywood Securities, and Mackie Research wherein it placed 11 million units at a cost of 65¢ per unit. The financing included a full excercise of an over-allotment option totalling roughly 1.4 million units.
Earlier in June Wellgreen made strides in addressing one of the project's biggest question marks: power supply. Since the deposit sits in a relatively isolated area of the Yukon — around 300 km northwest of Whitehorse — the company has been hoping to lockdown a supply of liquefied natural gas (LNG).
Wellgreen announced on June 4 that it had signed a pair of agreements that could offer a solution. One memorandum of understanding (MOU) is with Northern Lights Energy for the supply of LNG from Alaska, while the second is with General Electric Canada for the supply of LNG power generation equipment and services.
Wellgreen has traded within a 52-week window of 42¢ and $1.10, and jumped 7% on 413,000 share trade volumes following the resource update en route to 67¢ close at the time of writing. The company maintains 94 million shares outstanding for a $63 million press time market capitalization.
- See more at: https://www.northernminer.com/news/wellgreen-platinums-resource-update-sets-stage-for-pea/1003174393/?&er=NA#sthash.AB7US4jp.dpuf