Wolfden Resources (TSXV: WLF) has released a preliminary economic assessment for its Pickett Mountain massive sulphide project in northern Maine, about 5 km from the nearest highway and 24 km from a rail line.
The early stage study outlines a mine life of 10.7 years producing a total of 600.2 million lb. of payable zinc, 230.1 million lb. payable lead, 78.3 million lb. payable copper, 8.1 million oz. payable silver and 38,324 oz. gold at all-in sustaining costs of $0.38 per lb. zinc.
The underground mine could be built for initial capex of $147.4 million, including a 20% contingency, with a payback of 2.4 years at base case metal prices of $1.15 per lb. zinc, $1 per lb. lead, $3.00 per lb. copper, $18 per oz. silver, and $1,500 per oz. gold.
The study calculated an after-tax net present value at an 8% discount rate of $198 million and post-tax internal rate of return of 37%.
“The Pickett Mountain deposit represents one of North America’s highest-grade undeveloped polymetallic deposits with fundamentals that are indicative of a top quartile project, including one of the lowest AISC $0.38/lb. zinc in our sector,” Jeremy Ouellette, the company’s vice president of project development, stated in a news release. “With this kind of a break-even zinc price, the project can sustain metal price market declines that have not been seen in decades.”
The project contains indicated resources of 2.2 million tonnes grading 9.25% zinc, 3.68% lead, 1.32% copper, 96.4 grams silver per tonne and 0.9 gram gold per tonne for a zinc-equivalent grade of 18.23%. Inferred resources add 2.3 million tonnes averaging 9.79% zinc, 3.88% lead, 1.15% copper, 101.1 grams silver per tonne (18.62% zinc equivalent).
Ron Little, the company’s president and CEO, noted in the press release that Pickett Mountain is “still largely unrecognized by investors and not reflected in the current market capitalization of the company.”
“With base metal prices moving higher, these results reaffirm our commitment to increase and upgrade the mineral resources through aggressive exploration and to further de-risk the project with our ongoing pre-permitting efforts and additional technical and baseline studies.”
Pickett Mountain was previously known as the Mount Chase deposit and was discovered in 1979 through regional soil sampling by Getty Mining, a division of Getty Oil. Getty Mining followed up with geophysical surveys and diamond drilling until it was taken over by Chevron. Chevron explored the property intermittently between 1985 and 1989, with programs including deeper drilling and pre-feasibility study work. In 1989 Chevron abandoned metals exploration and the project has not been effectively explored since then.
Over the last year Wolfden Resources has traded in a range of 7¢ and 32¢ and at presstime in Toronto was trading at 25¢. The company has about 131 million common shares outstanding for a market cap of about C$33 million.
(This article first appeared in The Northern Miner on September 14)