VANCOUVER — It’s been a busy couple of years for explorer Wellgreen Platinum (TSXV: WG; US-OTC: WGPLF) as it develops its wholly owned Wellgreen platinum group metals (PGM) deposit in Yukon’s southwest corner. The company has been pushing to complete an updated preliminary assessment (PEA) on the project, and has just completed the first resource update in over two years.
Wellgreen is a sizable PGM discovery that also hosts nickel, copper and cobalt mineralization. The property has been explored as far back as the 1950s, with a drill history that totals 231,000 metres. The company’s updated resource incorporates historic core re-assaying and its own drilling conducted since 2012, which adds up to 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 that have tested 2.5 km of a system that runs for 20 km. Wellgreen averages 100 to 200 metres thick at surface in the Far West zone, expands to 500 metres thick in the Central zone and nearly a kilometre wide in the Far East zone, where the deposit remains open downdip and along strike.
Wellgreen’s work has boosted global resources at the project, and a new model has increased confidence in the company’s ability to convert large-scale inferred resources into the indicated category.
Measured and indicated resources at Wellgreen 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-gram platinum equivalent cut-off that totals 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. platinum, palladium and gold (3E) in the measured and indicated category, and 14 million oz. 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.”
In late June 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. Each unit consists of a share and a warrant exercisable at 90¢ within two years. The financing included a full exercise of an over-allotment option totalling 1.4 million units.
Also in June Wellgreen made strides in addressing one of the project’s biggest question marks: power supply. Since the deposit sits in an isolated area of the Yukon 300 km west of Whitehorse, the company has been hoping to lock down a supply of liquefied natural gas (LNG).
In early June Wellgreen signed a pair of agreements that could offer a solution: a memorandum of understanding with Northern Lights Energy for supplying LNG from Alaska, and one with General Electric Canada for supplying LNG power-generation equipment and services.
Wellgreen shares trade within a 52-week range of 42¢ and $1.10, and jumped 7% on 413,000 shares traded after the resource update, en route to 67¢ close at press time.
The company has a total of 94 million shares outstanding for a $63-million market capitalization.
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