In the heart of British Columbia, Canada, a new study has illuminated a high-grade gold project with immense potential, situated right off a highway. The findings indicate a compelling low-cost, high-margin opportunity that has captured the attention of investors seeking exceptional returns.
Good grades are undoubtedly a crucial factor in any mining project, but what truly directs this venture on the right path is the robust economics backing it. Westhaven Gold has recently accomplished a significant milestone by completing a positive Preliminary Economic Assessment (PEA) on the South Zone of its 100% owned 17,623-hectare Shovelnose Gold Project.
Highlights of the PEA study:
- Internal Rate of Return (“IRR”) of 41.4%, after-tax IRR of 32.3%
- Low All-In Sustaining Cost of $989/oz, (US$752/oz) gold equivalent
- Pre-tax Net Present Value (“NPV”6%) of $359 million and After-tax NPV of $222M
- Payback period of 2.4 years pre-tax
- Average production grades of 5.37 g/t gold and 28.62 g/t, silver
- Metallurgical recoveries of 91.5% Au and 92.9% Ag
*Base case parameters of US$1,800 per ounce gold, US$22 per ounce silver and CDN$/US$ exchange rate of $0.76.
*All costs are in Canadian dollars unless otherwise specified.
In comparison to industry peers with an average All-In Sustaining Cost (AISC) of approximately US$1250 per ounce of gold, Westhaven’s deposit appears remarkably promising, boasting a much lower cost at US$752 per ounce of gold equivalent (AuEq). Only minutes away from the city of Merritt certainly helps with ease of access that many peers must envy. In regards to the South Zone structure, it benefits from wide, steeply dipping mineralization veins which lends itself well to low cost longhole mining. Furthermore, the project offers rapid payback and outstanding grades, which may pleasantly surprise many stakeholders. The results from the underground PEA study serve as a solid foundation for expanding the gold-silver mineral inventory beyond the South Zone, and speculating on further growth potential.
Delving into the data of the previous mineral resource estimate (MRE) based on an open pit scenario, the numbers presented an opportunity to envision the deposit in an underground scenario. The previous 2022 MRE indicated a substantial 1.1 million ounces in both inferred and indicated categories. In contrast, the underground total payable material tallies approximately 500,000 ounces of gold and just under 600,000 ounces of gold equivalent, flaunting a considerably higher grade at 5.37 grams per tonne gold and just under 30 g/t silver. Although distinct from the open pit approach, the underground strategy proves more robust with a much smaller environmental footprint.
While Westhaven Gold primarily remains an exploration play, the preliminary numbers are a promising start, revealing an After-tax Net Present Value (NPV) of $222 million and a mine life of 9.5 years—a solid foundation to build upon.
A key takeaway from this is that the South Zone is only 600 meters by 200 meters and drill holes outside the resource have extended the strike length a further four kilometers along the Vein Zone 1 trend to the northwest. The PEA does not encompass some highly compelling results, including the Franz discovery hole SN20-101, yielding 7.78 meters of 14.84 g/t Au and 39.40 g/t Ag at the surface. Additionally, the recent drill hole SN23-337 at the Franz zone boasted 24.95 meters of 14.66 g/t Au and 35.52 g/t Ag, while hole SN22-333 unveiled 6.20 meters of 73.51 g/t Au.
The Shovelnose gold property now boasts three distinct zones with drill intercepts exceeding 450 gram-metres, and notably, the FMN Zone recorded an unprecedented 857.64 gram-metres—the highest gold-silver intercept ever drilled on the property. Hole SN22-212, featuring 23.03 meters of 37.24 g/t gold and 214.70 g/t silver, was drilled over 2 kilometers from the heart of the South Zone resource, underscoring the vast potential for further expansion.
Westhaven’s flagship Shovelnose Gold Property is strategically located within the highly prospective Spences Bridge Gold Belt, which borders the Coquihalla Highway 30 kilometres south of Merritt, BC—a tier 1 mining jurisdiction. It’s a big property and still largely underexplored. Field work and drill programs for this year are fully funded with ~$6 million working capital. As part of its growth strategy, the company is actively drilling additional properties along the Belt, fueling excitement for potential new discoveries.
In conclusion, Westhaven Gold’s Shovelnose Gold Project presents an extraordinary opportunity for investors seeking exposure to a high-grade, low-cost gold venture in a promising mining jurisdiction. With strong economics, significant exploration upside, and a dedicated team, Westhaven Gold is poised for success. Stay tuned for more updates as we embark on this remarkable journey toward unlocking the full potential of our exceptional gold project.
Watch video to learn about recent discoveries outside the PEA.
Securities Disclosure: At the time of writing, the author holds shares in Westhaven Gold Corp. and also has a working relationship with the company.
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