Canadian Gold Explorer Starts Summer-Fall Drill Program
These efforts could lead to resource expansion at its flagship project and thus a stock rerating, an analyst noted. Read on to learn more.
Westhaven Gold Corp. (WHN:TSX.V) began 4,000 meters (4,000m) of diamond drilling, the summer-fall phase of its 2024 program, at its flagship Shovelnose gold-silver project in British Columbia (B.C.) to test seven newly identified, high-priority targets, noted a news release.
These targets are Line 6 North, Line 6-MIK, CSAMT-3, Romeo and three different sites at Certes, each about 1 kilometer (1 km) apart, noted the release. The company identified them through prospecting, mapping and sampling in 2023 and 2024 and review of geological, geochemical and geophysical data, including that obtained from spring 2024 drilling.
The company could grow the existing Shovelnose resource by drilling these additional targets, wrote Taylor Combaluzier, Red Cloud Securities vice president and mining analyst, in a January 2024 research report.
"We view resource growth as the best catalyst for a potential material rerating of the stock, and we expect Westhaven to continue working towards delineating sufficient gold resources that could be of interest to larger mining companies," Combaluzier wrote.
Most of the seven targets are in the highly prospective, 11 km-long Shovelnose corridor, containing multi-element pathfinder anomalies, antimony, mercury and the recently discovered Certes showing. The corridor extends southeast into Westhaven's 12 newly acquired claims from Talisker Resources Ltd. (TSK:TSX), which expanded the Shovelnose property to 41,623 hectares (41,623 ha) from 23,550 ha, according to an August 22 news release.
"Our boots-on-ground exploration approach this summer has identified what we feel could be the southeastern extent of Vein zone, some 6 km away from the South zone," Gareth Thomas, Westhaven president, chief executive officer (CEO) and director, said in the release. "The discovery of banded mercury-bearing, high-level epithermal quartz makes us believe we are at the top of a completely preserved epithermal system at Certes."
Several Targets in Unexplored Gold Belt
Headquartered in British Columbia, Westhaven Gold Corp. is a gold-focused explorer with four properties spread out but together spanning 60,950 ha in B.C.'s Spences Bridge gold belt, a large and unexplored, emerging Canadian gold district highly prospective for epithermal-style mineralization, according to the July 2024 Corporate Presentation.
Westhaven currently is advancing Shovelnose, located off of a major highway, near power, rail, large producing mines and within commuting distance, or 30 km, of the city of Merritt.
"Gold looks to continue to trend higher to its cup and handle measured upside target of US$3,000/oz," he wrote. "Meanwhile, miners and juniors are in a prime position to leverage this move. There is still plenty of value and upside potential in high-quality juniors. Now is the time to act because it might be too late in the fall."The discovery hole at Shovelnose, drilled in the South zone in 2018, returned 17.7m of 24.5 grams per tonne gold (24.5 g/t Au) and 107.92 g/t silver (Ag). A subsequent resource estimate calculated for the South zone encompasses 654,000 ounces (654 Koz) of 6.81 g/t gold equivalent (Au eq) in the Indicated category and 176 Koz of 4.1 g/t Au eq in the Inferred category.
A preliminary economic assessment of the South zone outlined an underground mining operation producing 56,100 ounces of gold annually over 9.5 years of mine life at an all-in-sustaining cost of US$752/oz of Au eq. An after-tax net present value of the project was calculated to be US$222 million (US$222M) and the internal rate of return, 32.3%, using US$1,800/ounce (US$1,800/oz) for gold and US$22/oz for silver.
In 2022, Westhaven encountered the highest grade intercept yet at Shovelnose in the FMN zone: 23.03m of 37.24 g/t Au and 209.52 g/t Ag. In 2023, the company hit bonanza grades in the Franz zone, specifically 39.42 g/t Au and 51.81 g/t Ag. The MIK, Alpine, and Lear zones also have demonstrated high-grade mineralization.
In addition to Shovelnose, Westhaven owns the Prospect Valley, Skoonka Creek and Skoonka North properties together spanning 59,327 ha in the Spences Bridge belt. Because all are near the highway, cities and infrastructure, exploration can be done at low cost, the company noted.
As for finances, Westhaven had US$1M in cash as of July.
Analyst: Gold, Silver to Slingshot Higher
The outlook for gold and silver is remarkable, according to experts.
"Gold exploded out of its 13-year cup and handle pattern through US$2,100/oz, and soon after, silver broke out of a three to four-year range past US$26/oz," wrote Jordan Roy-Byrne in The Daily Gold on August 23.
According to Technical Analyst Clive Maund, gold's emphatic breakout in April kicked off what is expected to be the metal's "most spectacular bull market to date," marked by an "enormous" ascent. The rise, already underway with the gold price hitting new highs, is still in the early stages.
"In short, we are looking at a perfect storm that will lead to gold doing a 'moonshot,'" Maund wrote in an August 19 report. "Investors can, therefore, buy gold and most gold-related investments with confidence."
Regarding gold stocks, they are expected to have impressive uplegs, too, Roy-Byrne highlighted, given the current bullish alignment of the technicals, fundamentals and sentiment (still negative).
"Gold looks to continue to trend higher to its cup and handle measured upside target of US$3,000/oz," he wrote. "Meanwhile, miners and juniors are in a prime position to leverage this move. There is still plenty of value and upside potential in high-quality juniors. Now is the time to act because it might be too late in the fall."
With respect to gold mining, the global market is expected to grow to US$274.2 billion (US$274.2B) in value by 2032 from US$201.2B in 2032, according to Market Research Future. The forecasted compound annual growth rate during this period is 3.5%.
Significant drivers of this projected growth overall, the market analysis company noted, are the increasing population of high net worth individuals and a growing demand for gold jewelry, including among men.
Looking at silver, its breakout beyond US$30/oz will be the start of a "massive, unprecedented bull market," purported Maund in an August 19 report.
"Gold's massive, unprecedented bull market has already begun, and where gold leads, silver will follow," the analyst wrote.
Silver had what Maund calls a "preliminary breakout" a couple of months ago but then reacted back into pattern.
"What this means is that silver and all things silver are a terrific bargain here with these sorts of prices not expected to last much longer and may never be seen again," Maund emphasized.
The time to buy is ahead of the breakout that leads to the bull market. With gold surging upward, silver, which already has started climbing, could start its run-up soon.
John Ciampaglia, CEO of Sprott Asset Management, told Kitco News on August 26 that silver is undervalued and its price should soar now that gold has reached a new all-time high above US$2,500/oz.
"It's mind-boggling to us that silver is still below US$30," Ciampaglia said. "It is obviously way off its 2010 highs, and we would love to see it get back to the US$50 level. We think it has the ability to do that over time."
Earlier this month, J.P. Morgan predicted the silver price would climb to an average of US$36/oz by 2025, driven by "supportive monetary policies, growing industrial demand, inflationary pressures, and potential supply constraints," according to an August 6 article.
Silver is expected to have its fourth consecutive year of a global supply deficit in 2024, according to an August 15 International Banker article. The deficit is expected to increase this year, too, by 17%, due to a 2% growth in demand and a 1% drop in total supply, according to data from The Silver Institute.
The Catalysts: Resource Expansion Progress
Additional drill results are expected as Westhaven continues efforts to expand the Shovelnose resource, as noted in the corporate presentation. Another near-term goal is updating the current resource estimate.
"We look forward to additional results from the ongoing drill program at Shovelnose that is focused on evaluating newly defined structural targets outside the main 4 km Zone One trend," Combaluzier wrote in a June 4 research report. Zone One hosts the South zone.
Bullish on Westhaven, Combaluzier has a target price on the company that implies a 622% return for investors. His rating on the stock is Buy.
Streetwise Ownership Overview*
Westhaven Gold Corp. (WHN:TSX.V)
*Share Structureas of 8/28/2024Source: RefinitivOwnership and Share Structure
According to Refinitiv, 16.32% of the company is with management and insiders. Advisor Gren Thomas owns 7.61%, with 11.82 million shares. President, CEO, and Director Gareth Thomas owns 2.69%, with 4.17 million. Chairman Eira Thomas owns 2.15%, with 3.33 million. Director Victo Tanaka owns 1.90%, with 2.95 million. CFO Shaun Pollard owns 1.84%, with 2.86 million, and Director Hannah McDonald owns 0.13%, with 0.20 million.
7.33% is owned by strategic investor Anglo Celtic Exploration Ltd. at 7.33%, with 11.38 million shares.
5.79% is with institutions. Merk Investments LLC. has the largest out of this category at 3.54%, with 5.50 million shares.
The rest is retail.
In terms of share structure, Westhaven has 155.2M outstanding shares and 118.48M free float traded shares.
The company has a CA$21.26M market cap and a 52-week trading range of CA$0.115-0.335 per share.
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