As its name suggests, exploration company Duncastle Gold (TSXV:DUN) used to be focused on the Black Lake/Drayton gold projects in Ontario’s Wabigoon (Rainy River) Greenstone Belt. However, with this summer’s agreement to secure a 100-percent earn-in on several platinum-group metals (PGMs)-nickel-copper properties in Canada’s Yukon, Duncastle is shifting its focus.
That might seem like an unusual move, but according to Michael Rowley, Duncastle’s CEO, the deal was a great opportunity. The company’s newly acquired Catalyst, Spy and Ultra projects “control the strike extension to an ultramafic sequence of rocks adjacent to Wellgreen Platinum’s (TSXV:WG) world-class PGMs-nickel sulfide deposit,” and while Duncastle plans to keep a foot in the gold game, it is committed to its new focus.
“We will probably shed the Duncastle name, and we will certainly drop ‘gold’ from the name to become a nickel-PGMs company,” Rowley said.
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In good company
For Duncastle, its properties’ proximity to Wellgreen Platinum’s project is “a big part” of its new story.
That company released a significantly upgraded and expanded mineral resource estimate for its Wellgreen project at the end of July, bringing its measured and indicated resources to 5.5 million ounces of platinum, palladium and gold and upping its inferred resource to 13.8 million ounces.
Highlighting the significance of that upgrade, Rowley said that those numbers have already made the Wellgreen area a world-class district for PGMs. With the updated resource, the Wellgreen deposit has “gone from being one of the biggest outside of South Africa and Russia to being simply one of the biggest,” the CEO said, “and they’ve only just begun.”
As Rowley explained, the Kluane Ultramafic Belt in the Yukon, where both Wellgreen and Duncastle are located, is highly prospective for platinum and palladium. Wellgreen has started with historic mining areas, or “where the obvious showings and the history are,” but there’s definitely significant potential for discovery that remains unexplored.
That’s good news for Duncastle. All three of its properties lie along strike with Wellgreen, and Rowley stated that there are “very similar showings” and good indications that Duncastle’s properties could have similar potential, particularly for the Catalyst project, which adjoins Wellgreen on three sides. Although Duncastle has not commenced drilling at the project, historic sampling has identified mineralization with surprising grades for platinum, palladium and gold “with a geophysical signature that suggests a continuation along strike.”
Sharing is caring
Duncastle’s relationship with Wellgreen doesn’t end with rocks. Rowley has met with Wellgreen Platinum’s CEO, Greg Johnson, and spoke very highly of him. He sees potential for Duncastle to utilize Wellgreen’s mining camp for exploration since the projects are so close together.
Furthermore, Duncastle stands to benefit from broader infrastructure projects to be undertaken by Wellgreen, which recently made a move to power its operations and others in the area with liquefied natural gas. “That also makes it a particularly clean mining operation,” Rowley added. “Platinum already has a nice ‘green’ feel to it because it’s used in things like catalytic converters, and to further that by using cleaner fuels is excellent.”
To be sure, interested investors will want to look into both companies and keep an eye on what they are up to in the Great White North. Rowley admitted that it’s still early days for Duncastle and the Yukon, as the company has a sub-$1-million market cap with just 14 million shares out. However, in his opinion, that could be an advantage for investors. “This is a really good opportunity to take an early position in a venture with terrific upside”, he said.
In terms of what’s next for Duncastle, Rowley noted that the company currently has a private placement open, and is hoping to get some drilling done on the Catalyst property soon. “Weather permitting and with the option to utilize Wellgreen’s nearby mining camp, we have the potential to complete drilling at Catalyst, even into October,” he said.
Wellgreen Platinum Fully Booked At Institutional-Only Denver Gold Show
Sep. 15, 2014 3:37 PM ET | 3 comments | About: Wellgreen Platinum Ltd. (WGPLF)
Disclosure: The author is long WGPLF. (More...)
Wellgreen Platinum's recent Resource jump greatly exceeded market expectations; metallurgical improvements have opened a whole new level of institutional interest.
Wellgreen has been invited to the prestigious Denver Gold Show starting 9/15 – institutional investor demand for one-on-ones is "extremely strong".
Wellgreen may be the world's best undeveloped PGM project, selling for only $65 million.
Yes, at $3 per platinum/palladium/gold resource ounce, Wellgreen is a "multi-bagger".
(Editor's Note: Investors should be mindful of the risks of transacting in securities with limited liquidity, such as WGPLF. Wellgreen Platinum's listing in Toronto, WG.TO, offers stronger liquidity.)
Wellgreen Platinum's (OTCQX:WGPLF) "roll out" towards a new class of institutional investors is just beginning. Interest is "extremely strong" - we heard Wellgreen had over 30 institutional meetings at Vail last week, plus a full slate (and Wellgreen's first ever invitation to present) at this week's prestigious Denver Gold Show.
Even through the metals environment is still tough, the investment thesis remains unchanged: Wellgreen's unique location and massive size make them ideally suited for low risk entry with corresponding tremendous upside leverage... within a reasonable market recovery.
3 years ago we saw lesser projects (than the current Wellgreen) selling for over $1 billion. We expect a reasonably better market over the next 2 years and Wellgreen's uniqueness make them a Top Pick.
Investors who disagree should avoid the commodity sector entirely and perhaps stick with the 'new economy' internet stocks selling at only 100X earnings. Good luck.
Professional research coverage is increasing
2 new brokerage analysts have recently written up of Wellgreen - visiting the property, meeting the team, viewing the drilling core, discussing the Company's resource update, metallurgical recovery and "right sizing" efforts, and conducting in depth due diligence. Several more are interested and waiting for the PEA.
We encourage investors to review these professional reports directly as without performing an in-depth due diligence, which certainly includes a site visit, viewing the actual drilling core, meeting and discussing with the team, etc, it is easy to make serious mistakes.
As Wellgreen shareholders, then, we do strongly disagree with the editors in allowing an article out which blatantly calls Wellgreen a "pig" - as the title suggests. We will respond with a few comments on the errors and point out some rather obvious (to us) "spin doctoring" and then trust readers capable of making their own conclusion.
The most glaring flat out error is that the project is 80% peridotite. The block model cross sections the Company has published on its website and in its presentation refute this. Management has been consistent in describing mine planning that has been ongoing and extrapolating starter pits from those cross sections, it looks like the initial mining stages might average somewhere around 80% Pyroxenite with 20% Gabbro. This was even noted in recent press releases.
What's more, based on an inquiry on this subject directly with the Company, the Peridotite is typically below 1.5 g/t Pt Eq. and would, therefore, not be a significant component of any initial mine plan.
Smart money returning
Professional investors are just beginning to return to mining equities. George Soros has increased his mining stock exposure, for example. Wellgreen is well-suited to benefit - one fund manager (who runs a large London-based mining fund) e-mailed us in what is probably the best representation of the current situation: "Wellgreen may end up as the go-to name in platinum/palladium" he wrote.
In our view, Wellgreen is now in almost sole possession as the premier low priced, undeveloped platinum/palladium pure-play, outside of Russia or South Africa. Indeed, recent problems at Duluth (OTCPK:DULMF) and permit questions at Polymet (NYSEMKT:PLM) seem to confirm this; but we wish them well, there is room for all.
Nevertheless, the fact that Wellgreen has also found billions of tons of nickel, copper, cobalt etc. only enhances the value and economics. That is a good thing.
We are rather perplexed at what appears to be an attempt to discredit Wellgreen because of the nickel component (and how could calling Wellgreen "Nickel" a "pig" be anything else?) when in fact Wellgreen management has consistently stated they are a polymetallic deposit that contains PGMs and base metals, nickel, copper and cobalt. The base and precious metals are co-products in most of the deposit. This will either be a very low cost co-product mine or an extremely low cost precious metals mine. The fact that they have also found 6 billion pounds of nickel is a good thing.
As we see it: the key words above are "low cost" - either way one chooses to describe Wellgreen. it is all about "low cost".
Letter To The Page: Mayor Ross Petersen Of Ely, Minnesota
As we looked out the windows of the council chambers and watched the Hispanic men reroofing the Sustainable Ely
building, I knew what the first question was going to be. “I wonder what part of Ely those guys are from?” And I could have almost
predicted the second question. “How can those people (Sustainable Ely) keep saying that Ely has a ‘vibrant and sustainable
economy’? With all of our empty store fronts, the nursing home on the verge, the high school under 200 kids, and on and on, how
can they believe that?” My answer was the same as all of the other times I’ve been asked that…. They don’t believe it, it’s a hoax.
A hoax designed to make people from outside this area think that we don’t need any new jobs up on the East Range,
that in fact, copper/nickel mining would hurt the local economy. It’s like the canoe with the signatures on its way to Washington
DC. It’s designed to convey the message that our quiet little tourist town is making a plea to Washington to not let
foreign mining conglomerates ruin our community and local economy. It’s also a hoax. It’s a hoax because the
Sustainable Ely canoers will be conveying a message contrary to the fact that every local government within 50 miles of Ely has
unanimously passed resolutions supporting copper/nickel mining. Those canoers and the rest of Sustainable Ely are trying to get
political support to stop copper/nickel mining instead of letting it go thru the stringent state procedures
that will determine if it is environmentally safe to have this type of mining in our area. I think it’s time we sent our
own representatives out to Washington DC to tell the EPA and the Forest Service and our elected officials that the majority of
folks who live in this area want copper/nickel to be able to go thru the permitting process without interference from Washington
DC or politicians in general. We want to know if it can be done safely in our area, and we want it decided by someone with
a little more expertise than Bob Tammen or Reid Carron. And additionally, I think we should step out of our usual Minnesota super
nice and call the Sustainable Ely concept what it really is.
It’s a bald faced lie, designed to bring about a political action that’s contrary to the will of the majority of the local people.
Mayor, Ely, Minnesota.
"Based on our review of other commercial bulk nickel concentrates and smelting contracts, the Company and its concentrate marketing consultants believe that such a bulk concentrate is likely to have strong interest from multiple existing smelters."
"Based on the work with XPS and SGS labs, the Wellgreen mineralized material shows excellent metallurgical response that is typically above that observed in other similar grade deposits documented in their global databases."
many Asian smelters want this concentrate
Testing in 2013 and 2014 completed by SGS Lakefield Research Limited (SGS) and XPS Consulting & Test work Services (XPS), a unit of GlencoreXstrata
Greg Johnson, Wellgreen Platinum President & CEO states, “These new results clearly show that a high quality, smelter grade bulk concentrate can be produced from the Wellgreen mineralized material at high levels of recovery using conventional sulphide flotation. In addition, the high levels of platinum group metals and gold in these concentrates have potential to add substantially to their commercial value along with the nickel and copper. Based on our review of other commercial bulk nickel concentrates and smelting contracts, the Company and its concentrate marketing consultants believe that such a bulk concentrate is likely to have strong interest from multiple existing smelters.”
IROC Trading Halt - WG
VANCOUVER, Sept. 3, 2014 /CNW/ - The following issues have been halted by IIROC:
Company: Wellgreen Platinum Ltd.
TSX-Venture Symbol: WG
Reason: At the Request of the Company Pending News
Halt Time (ET): 7:03 AM ET
from wellgreen plat website
Wellgreen Platinum Corp. has received independent analyst coverage from Mackie Research Capital and H.C. Wainwright & Co. Investors wishing to receive copies of the reports may contact the analyst firm directly.
go their to find contact info as well
H. C. Wainwright & Co., LLC is an investment bank dedicated to providing corporate finance, strategic advisory and related services to public and private growth companies across multiple sectors and regions.
The H. C. Wainwright team has been the leader in the PIPE (private investment in public equity) and RD (registered direct offering) transaction markets.
According to Sagient Research Systems, the team has been ranked the #1 Placement Agent in terms of the aggregate number of PIPE and RD transactions cumulatively since 1998.
H. C. Wainwright was established in 1868 and is headquartered in New York City.
At Surface and Out of Africa: CEO Greg Johnson on Wellgreen Platinum’s Yukon Project
Wednesday July 2, 2014, 3:30pm PDT
By Teresa Matich+ - Exclusive to Platinum Investing News
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At Surface and Out of Africa: CEO Greg Johnson on Wellgreen Platinum's Yukon ProjectSouth Africa, long known as a platinum and palladium powerhouse, saw an end to a protracted miners’ strike last week. However, the white metals are still rallying, and South African mines will take time to ramp up production again. In light of those factors, investors and analysts may be interested in looking at companies that operate outside that country.
One such company is Wellgreen Platinum (TSXV:WG), which holds the Wellgreen deposit, a large PGM-nickel-copper deposit in Canada’s Yukon. It features mineralization that begins at surface rather than deep underground, making it noteworthy for miners and investors alike.
To find out more about the company, Platinum Investing News (PIN) spoke with Wellgreen’s president and CEO, Greg Johnson. In the interview below, the CEO discusses the unique characteristics of the Wellgreen deposit, the importance of PGM projects in mining-friendly jurisdictions and what’s next for Wellgreen Platinum.
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PIN: Just to start off with, I don’t think we’ve covered Wellgreen extensively on our network before, so could you tell our readers a bit about your company?
GJ: Wellgreen is a PGM-focused exploration and development company, and our primary asset is the Wellgreen project, which is located in the Yukon territory. It’s one of the largest undeveloped platinum and palladium resources in the world at about 10 million ounces, and it’s an open-pittable type deposit. This is quite unique in that most of the world’s platinum and palladium is concentrated in Southern Africa and Russia, so a large deposit in general is quite rare, and one that’s located in Canada in an open-pittable type configuration is even more scarce, so we’re seeing strong investor interest in the company. We just recently completed a $6.9-million financing that’s going to allow the company to move seamlessly into the prefeasibility level of activity this field season.
PIN: How does the Wellgreen deposit compare to others around the world?
GJ: Wellgreen is one of the largest undeveloped projects of its kind in the world, and has the potential to be a very significant producer. Most of the world’s platinum and palladium production is coming from deep, underground mines that are quite costly to operate, very labor intensive and don’t have the ability to really scale up the way you can with an open pit.
Our project is quite unique in that its very wide widths of mineralization start right at surface and are typically between 100 and up to 700 meters wide. So in many ways our project would look more like a porphyry copper-gold type deposit, except that our metals are PGM and nickel. This is a project that was historically developed back in the 1970s by HudBay Minerals (TSX:HBM) as a high-grade underground operation, but since the late 90s, the focus has been on looking at it as a bulk mineable deposit, and that has been the focus of Wellgreen Platinum’s activities as well.
PIN: Interesting. I’ve seen a few comparisons between platinum deposits; for example, Ivanhoe Mines’ (TSX:IVN) Flatreef deposit in South Africa vs. the Bushveld Complex. How does Wellgreen compare to that deposit?
GJ: In terms of comparison, what makes the Ivanhoe and Platinum Group Metals (TSX:PTM,NYSEMKT:PLG) deposits stand out from the others in South Africa is that even though they’re mostly underground, they have much greater widths of mineralization than is typical of the area. I believe with Platinum Group Metals it’s around 25 meters width and I think for Ivanhoe it’s up to 90 meters in width.
Our mineralization on the western end of the Wellgreen deposit, where it’s the narrowest, is about 100 to 200 meters in width, and it widens out to over 500 meters at surface in the central part of the deposit; it then expands to almost a kilometer wide at the eastern end of the deposit where it’s open. So it’s a very large system, and we’re also fortunate with the geometry, since mineralization starts right at surface as opposed to being a kilometer deep or more, which is more typical in South Africa and Russia. And that’s just really the result of the particular geologic setting that we have at Wellgreen, which means that it happens to be exposed right at the surface. That allows us to look at far wider zones of mineralization with a slightly overall lower grade because it’s open-pit mining cost as opposed to underground mining cost.
PIN: How unusual is it to have an open-pittable platinum deposit?
GJ: It’s quite unusual, around 95 percent of the world’s platinum production is from underground mines. There are a handful of projects in the first world that are open pit and those tend to be the lowest-cost producers. I think much like we’ve seen in the gold and the silver business over time we’re going to see a migration towards the lower-cost, higher-scale, open-pit type operations. The challenge is you have to have the right kinds of geology, the right rocks to host these deposits, and the ultramafic rocks that host ours are exceedingly rare; they only occur in a few places globally.
PIN: And you said there was historic mining in the area?
GJ: Yes, the historic infrastructure is still in place and available. We are right now updating our preliminary economic assessment on the project and targeting this summer for release. It will update the overall resource estimate on the project, as well address the major objective of converting a significant portion of the inferred ounces into measured and indicated.
Importantly, it will also update the overall approach to the mining of the project. The new approach that’s being developed is looking at a smaller-scale operation that has lower capital investment up front, but is focused on higher-grade material, so we think that should enhance the economics. Then, later in the mine plan, the project gets naturally wider as we start mining deeper and towards the east the project; at that point, we would likely scale up to a higher throughput level with the geometry of the deposit changing. And that could result in the project being one of the largest first-world PGM producers.
PIN: What does your timeline look like in terms of getting to commercial production?
GJ: Right now we are looking to start prefeasibility activities in the second half of this year. That would likely allow us to start feasibility activities in 2015, so potentially we could be looking at a construction decision in 2017, which would allow for first production in 2018 or perhaps 2019. For a development-stage project, it has the opportunity to move quite rapidly, and because the Yukon is one of the best jurisdictions for mining in Canada, there’s a very straightforward permitting and regulatory process to move the project forward to production.
PIN: Your website highlights the importance of your project being outside of South Africa and Russia, which have been problematic jurisdictions in the past, but are the world’s largest PGM producers. What is the importance of platinum and palladium projects outside of these jurisdictions?
GJ: Starting on the demand side in general, the fundamentals for platinum and palladium are quite different than what we see today in gold and silver. Platinum and palladium are also precious metals, but the single largest use for both is catalytic converters in automobiles. So we’ve basically seen nearly continuous demand growth since the mid-1980s for platinum and palladium, particularly for catalytic converters. As higher emissions standards are implemented in the first world and in the developing world, we’re seeing that growth continue.
That demand growth was matched up until the mid-2000s, with new mine supply of platinum and palladium as one might expect, but because of the challenges of mining deep underground in South Africa and in Russia, we’ve seen falling mine supplies since 2006 for platinum and since 2004 for palladium. The main decrease in supply on the platinum side was due to a decrease in production supply from South Africa, while the main decrease in supply of palladium came from decreasing supply out of Russia. So the opportunity to have a project located in Canada that has an open-pittable and very saleable configuration that could add to the source of supply outside of Southern Africa or Russia has real strategic value.
PIN: Given the current situations in Russia and South Africa, what do you think the future holds for PGM producers in North America?
GJ: Well, the trend was in motion well before the strike in terms of declining supply out of South Africa and Russia, so most analysts continue to project deficits in terms of mined supply vs. total demand for the metals. That’s obviously very bullish for projects that are in areas that don’t have the same kind of political and operating risks that we see today in South Africa and Russia. We would not expect that the removal of the strike would significantly change the overall fundamentals, and in fact, you’ve taken about a million ounces of platinum off the market this year from the strikes, so potentially with that lack of production taking away additional sources of supply for the market, I think analysts are expecting looking to see continued price increases looking forward to at least 2020.