Gareth Thomas's Westhaven Gold Corp. (WHN) lost one cent to 21.5 cents on 217,000 shares. Westhaven had gained three cents on 415,000 shares yesterday following midday word that the company had received a five-year permit covering 650 surface drill sites at its Shovelnose project, south of Merritt in southwestern British Columbia. The permit also allows trenching, bulk sampling, geophysics and construction work related to exploration access.
Mr. Thomas, president and chief executive officer, applauded the receipt of the permit as a "major milestone" for Westhaven as it provides "further opportunity to test the true scale and potential of the Shovelnose project." With the main bureaucratic obstacle out of the way, Mr. Thomas was careful to prevent any new issues from arising. Shovelnose is on the traditional territory of a local first nation and so he pledged to continue engagement and growing the working relationships with the locals.
Expect plenty of drilling this year as a result. Mr. Thomas says that he and his crew had identified several new mineralized areas of interest at Shovelnose last year, and they are now prioritizing the targets "with intent to drill them in the near term."
Drilling in terms past has produced plenty of assay encouragement. Last May, the company cheered a 24.95-metre hit that ran 14.66 grams of gold and 35.52 grams of silver per tonne in the Franz zone. In September, Westhaven applauded a 3.68-metre hit that graded 17.61 grams of gold and 31.49 grams of silver per tonne in the MIK target area.
Shovelnose already has a significant resource, with nearly three million tonnes indicated at 6.38 grams of gold and 34.1 grams of silver per tonne and another 1.33 million tonnes inferred at lesser grades, good for a total of nearly 780,000 ounces of gold and four million ounces of silver. That estimate supported a preliminary economic assessment that the company rolled out last summer.
The proposed $150-million mine would have a life of 9.5 years, running at 1,000 tonnes per day, averaging about 56,000 ounces of gold and just short of 300,000 ounces of silver per year. The bottom line was encouraging, with an internal rare of return of 32 per cent and a discounted net present value of $222-million after taxes. Not good enough, you say? Well, just jack up the projected metal prices closer to current spot values. At $1,950-an-ounce gold and $24 silver, the rate of return reaches 37 per cent and the discounted value climbs close to $270-million.