Rockhaven Resources (TSXV: RK; US-OTC: RKHNF) is pushing ahead at its Klaza gold project in the southern part of Yukon’s Dawson Range gold belt, updating metallurgy and resources, while trying to show the project’s potential.
“We’re kind of everything people are looking for in an exploration project,” company president and CEO Matt Turner said during a sit-down interview in Dawson, Yukon, at a conference in late June.
“It’s close to a town, close to the capital city of Whitehorse. It’s road accessible and it’s in a developed area.”
The 287 sq. km property is a three-hour drive from Whitehorse. It’s 50 km west of the town of Carmacks — which has a population of 493 people — and accessible by taking the Klondike highway to a dirt road.
“The access road is government maintained year-round, up until the old mine site, which is 8 km away, because they’re doing reclamation,” Turner said.
As of April, the company had achieved 82% gold recoveries in the project’s Eastern BRX zone by using flotation and cyanide leaching. Previously the Eastern zone responded poorly to flotation test work, and the company didn’t include it in its 2016 preliminary economic assessment (PEA).
The company adds that three of the four main zones respond well to pre-concentration test work. Using dense media separation, the company more than doubled its average gold grades. Its recoveries now range from 87–98.2% gold.
“There is this stigma out there around the metallurgy,” Turner said, “but we’ve found a way that works and it’s conventional, and I think it’s just further educating people that we’ve figured it out.”
Due to the recently updated resource, the PEA is now out of date. But the study found the project had an $86-million, after-tax net present value at a 5% discount rate and a 14% after-tax internal rate of return.
As of an update on June 5, 2018, the Klaza project contains 4.45 million indicated tonnes grading 4.8 grams gold, 98 grams silver, 0.7% lead and 0.9% zinc for 686,000 oz. gold, 14.07 million oz. silver, 73 million lb. lead and 92 million lb. zinc.
The project also has 5.7 million inferred tonnes at 2.8 grams gold, 76 grams silver, 0.6% lead and 0.7% zinc for 507,000 oz. gold, 13.9 million oz. silver, 77.5 million lb. lead and 89 million lb. zinc.
About half of the overall resource is pit-constrained. The other half the company would have to mine using underground methods.
Nearly 60% of ounces are in the indicated category. The company infill-drilled in 2017 for $4 per oz. gold.
“I’d say on the Klaza resource area, in particular, we have a really good grasp,” Turner said. “The resource that we just put out confirms that as we go in and infill this, the grade is increasing. That comes back to structural continuity and grade continuity.”
The main property has 11 mineralized zones totalling more than a 10 km strike length, within a 4 by 3 km structural corridor.
All veins start at surface, and the company has found mineralization as deep as 450 metres below surface. However, it says its model suggests mineralization could extend to 1,000 metres’ depth or more. The system is open to the east.
Rockhaven has trenched 24,500 metres, completed airborne and ground surveys and sampled soil geochemistry on a project that, according to Turner, is “quite simple” from a geological perspective.
“You’ve got a mid-Cretaceous intrusion,” Turner says. “It’s very brittle, homogenous, so it’s broken quite well. And then you’ve got quartz-feldspar porphyry dikes that have come up into these faults, and then after you would have had the veins come in.”
Rockhaven’s drilling season typically lasts from the end of May to early October. Usually it will “hit it hard” from June until the end of August. That’s what it did last year, drilling 16,000 metres over 98 holes in two and a half months, and finishing in August. In total, the company has drilled nearly 100,000 metres across more than 400 holes.
With more drilling, the company could upgrade the resource to a point where a prefeasibility or feasibility study is viable, but also drill step-out holes to expand the deposit.
“It always seems like — especially in this market — to really move the needle in a major way, a lot of it seems to be based on new discoveries,” Turner said.
“We want to keep adding value on the current resources, but I think you’ve got to throw some of those new discovery shots in, too. You’ve always got to give people that chance for the five- to 10-bagger, when they invest in these stories.”
The company found mineralized zones in 2017 outside of the main resource, including the Rusk target, a 2.6 sq. km soil geochemical anomaly lying a few kilometres south.
Shares of Rockhaven are trading at 14¢ with a 52-week range of 12¢ to 18¢. The company has a $21-million market capitalization and $600,000 in working capital. It owns 100% of Klaza, which has no royalties on resource areas.
Last year, Coeur Mining (NYSE: CDE) invested $2.7 million for 9.9% of the company. The investment helped fund last year’s drill campaign. Its biggest single shareholder is Strategic Metals (TSXV: SMD; US-OTC: SMDZF), which owns 39% of the company.
“This truly is where the market is right now,” Turner says. “You just have to stick to your guns and keep moving the project forward, and there’s going to come a point when the market catches up.”