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Wellgreen Project Overview
Location and Ownership
Prophecy Platinum's 100%-owned Wellgreen project, in the southwest of Canada’s mining-friendly Yukon Territory, is one of the world’s largest undeveloped nickel-sulphide projects. The deposit is rich in platinum group metals (platinum, palladium, rhodium, osmium, iridium, ruthenium) as well as nickel (Ni), copper (Cu) and cobalt (Co).
In July 2011, the Company released a NI43-101 compliant mineral estimate showing an indicated resource of 1.04 million oz PGM+gold, .22 billion lbs. of Nickel, .20 billion lbs. of Copper as well as an inferred resource of 10.97 million oz PGM+gold, 2.42 billion lbs. nickel and 2.23 billion lbs. copper.
Subsequent drilling results continue to demonstrate impressive mineralization. In spring 2012, Prophecy embarked on the first phase of an extensive infill drill program expected to upgrade a significant portion of Wellgreen's NI 43-101 inferred resource into the measured and indicated category. Comprised of both surface and underground drilling, the 2012 program exceeded 11,000m, with assay results expected to be announced throughout the latter portion of the year. The deposit is large, near surface and open along strike and at depth. The current target area represents a mere fraction of the overall 17.5km strike zone that comprises the Wellgreen Property as a whole.
Financial Model Results
|Wellgreen PEA Base Economics||Wellgreen Conservative Economics|
|Metal price assumptions
(LME trailing 3-year average)
|Metal price assumptions||Ni $7.00/lb
|Pre-tax NPV (8% discount rate)||$2.4B||Pre-tax NPV (8% discount rate)||$1.2B|
|Pre-tax IRR (100% equity)||32%||Pre-tax IRR (100% equity)||22%|
|Average annual pre-tax cash flow||$293M||Average annual pre-tax cash flow||$152M|
|Wellgreen July 2012 PEA Production Highlights|
|Mill throughput||32,000 tpd||Mine Life||37 years|
|Initial capital expenditures||$863M||Average strip ratio||2.57:1|
|Annual Metals Payable||47.7||54.5||3.3||63.9||85.6||35.2||125.8|
|Life of mine metals payable||1,763||2,017||120||2,365||3,167||1,302||4,653|
In August 2012, Prophecy Platinum announced the results of ongoing metallurgical testing for its Wellgreen Project. Metallurgical tests completed at SGS Laboratories under the direction of metallurgist Mr. Mike Ounpuu indicate separate nickel-PGE-cobalt concentrates grading up to 12.9% nickel and copper-PGE-gold concentrates grading up to 23.2% copper can be produced from Wellgreen’s disseminated PGE-Ni-Cu mineralization. The results are preliminary with grade and recovery optimizations planned on both precious and base metals in phase 2 of the metallurgical program in the fall. Environmental baseline studies were commenced in Q3 2012.
As a precious metal with a diverse range of uses from industrial to jewelry to investment, international platinum demand continues to grow. In spite of this, and as an historic anomaly, platinum is currently trading below the price of gold. Supply constraints resulting from the recent and ongoing, highly-publicized labour strife in major South African mines such as Lomnin is a very real threat. With South Africa the dominant global production region, many industry experts foresee this turmoil resulting in further significant increases in the price of platinum. New sources from stable regions like Canada will come to be heavily relied upon in the near future.
The Yukon Territory is ranked in the Fraser Institute’s 2011/2012 Survey of Mining Companies. The Wellgreen property is large and shallow, with extensive upside potential and sits just 15km by all-weather road from the Alaska Highway leading to Alaska's Haines deep sea port. With a mining history that dates back beyond the Klondike Gold Rush, the Yukon is home to an array of well-known projects held by respected firms including ATAC and Kinross.
Resource Corp. acquired 100% of Wellgreen through a merger with Northern Platinum on September 21, 2010. Prophecy Resource spun out its Canadian assets forming Prophecy Platinum and Prophecy Coal. Prophecy Platinum acquired 100% of Wellgreen from Prophecy Coal Corp. on June 13, 2011.
Management is focused on advancing the project, with most recent efforts centering around a surface and underground drilling program. In 2012 over 10,000 metres were completed. Results have and continue to be announced with further samples currently being assayed.
Wellgreen Plan View With Drill Targets
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Wellgreen Section View With Drill Targets
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The Wellgreen deposit was discovered in 1952 by the Yukon Mining Corporation Limited and optioned to Hudson Bay Mining and Smelting Ltd. From 1952 to 1955, Hudson Bay explored with 4,267 m of drifting and raising from four levels, two internal shafts and 19,815 m of surface and underground drilling.
The property was transferred in 1955 to Hudson-Yukon Mining Company Ltd. It conducted a Turam survey in 1968, drilled 762 m, prepared a feasibility study in 1969, and arranged a marketing agreement with Sumitomo in 1970. Due to underground problems, initial production from the 544 tonne/day mill was delayed from September, 1971 to May, 1972, and was suspended in July, 1973 after treating only 171,652 tonnes. Total production was 33,853 tonnes of concentrate, grading 7.4% nickel and 6.6% Cu.
Under the direction of the consultants Archer Cathro, extensive surface (10,909 m) and underground drilling (5,568 m) were conducted. The potential for low grade open pittable ore was recognized and planning for an open pit was initiated.
The property was optioned in June, 1986 by the Kluane Joint Venture (All-North Resources Ltd. and Chevron Minerals Ltd.) which carried out grid soil sampling, mapping, prospecting, bulldozer trenching and geophysical surveying. Hudson-Yukon was purchased by Galactic Resources Ltd. in June, 1986 and merged with All-North Resource Ltd. in November, 1986.
In 1987, additional soil sampling, bulldozer trenching, geophysical surveys, underground rehabilitation, and 4,932 m of diamond drilling in 45 holes were carried out. In 1988, the 4,250 level was rehabilitated, and 34 underground holes were drilled totaling 5,500 m. On surface, bulldozer trenching, and 37 holes totaling 6,073 m were drilled. Metallurgical tests and a preliminary feasibility study were carried out in 1988 and 1989 respectively.
J.P. Sheridan and Northern Platinum optioned the property in June, 1994 from All-North Resources and Sheridan, in turn, assigned the option to Northern Platinum, retaining back-in rights for half of that company's interest at the feasibility stage. Northern Platinum carried out reserve evaluation drilling and underground sampling.
In the summer of 1999, Northern Platinum Ltd. received Vancouver Stock Exchange approval to purchase Kaieteur Resource Corp. (formerly named All-North Resources Ltd.) and J.P. Sheridan's 20% interest in the Wellgreen property.
In 2004, the property was optioned to Coronation Minerals Inc. Coronation rehabilitated the two upper levels underground, and conducted sampling and both underground (577 m) and surface (6,671 m) diamond drilling. A Fugro helicopter-borne Mag and EM survey was conducted. The survey showed that the magnetic signature of the peridotite extended approximately 6 km on Northern Platinum's ground. A new resource estimate was calculated by Watts Griffis McOuat in 2008.
Geology and Mineralogy
Mineralized rock on the Wellgreen property occurs within a variably serpentinized, 20-km-long Triassic ultramafic body, known as the Quill Creek Complex that intrudes Permian sedimentary and volcanic rocks. Three main zones of platinum, palladium and rhodium-enriched copper-nickel mineralized rock have been outlined on the Wellgreen property: the East zone, the West zone and the North zone.
During the 1996 program, a total of 57 holes were drilled. The drill results confirmed previous tonnage and grade calculations, and several zones of higher grade material were indicated. A mining plant, complete with compressors, generators, office facilities, bunk house and cook house facilities were established near the portal of the adit.
During the summer of 1997, drilling took place on the Linda claims, southeast of the Wellgreen deposit. Assays over 1.3 m of massive sulphide minerals returned average grades of 4.12% Ni, 0.89% Cu, 0.06 oz./ton (2 g/t) Pt and 0.043 oz./ton (1.5 g/t) Pd. The lower showing is disseminated to semi-massive-sulphide minerals over a width of 20 feet (6 m) of broken rock ranging from 2.94% Cu and 3.02% Ni, with platinum and palladium assays as high as 0.13 oz./ton (4.5 g/t) Pt and 0.40 oz./ton (14 g/t) Pd. Drilling in the vicinity of the lower showing intersected sulphide mineralized rock grading 0.175% Cu and 0.187% Ni over 20 feet (6 m).
Northern Platinum conducted a program during 2001 of geology, geochemistry, geophysics, underground rehabilitation, trenching and diamond drilling on the Wellgreen property. A significant new showing was discovered, the SP, which highlights the potential of the entire Kluane Mafic-Ultramafic Belt.
In 2004, relatively high surface values of platinum and palladium were located in the new North Ultramafic zone, a 40-m-long zone parallel to, and 500 m north of, the main Wellgreen deposit.
Percussion-drilling was undertaken at the newly discovered platinum shear on the Wellgreen property in 2005. Four holes were completed from two sites: 1 and 2 from a site 70 m east of the Discovery Pit and 3 and 4 from a site 5 m west of the Discovery Pit. The Discovery Pit is located about 650 m north and 1,135 m west of the main portal.
The potential grade and tonnage of potential exploration targets for the Wellgreen property is conceptual in nature, and there has been insufficient exploration to define a mineral resource on the Wellgreen Property. It is uncertain if further exploration will result in all or any portion of the Wellgreen property being delineated as a mineral resource. The basis on which the disclosed potential grade and tonnage of potential exploration targets for the Wellgreen property has been determined is based on the presence of mineralized drill holes, known mineralized zones open along strike and/or laterally or at depth for exploration, known trends that are favourable for mineralization not fully explored, lowering the cut-off grades for known mineralization, geochemically and/or geophysically anomalous areas indicating potential mineralization not previously drill tested, size of favourable land holdings, and potential acquisitions immediately adjoining the Company's properties.
Mineral resources that are not mineral reserves do not have demonstrated economic viability. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this website.
Qualified Person under NI 43-101
Danniel Oosterman, P.Geo., a consultant of the Company is the qualified persons responsible for the technical information on this website.
Cautionary Note Regarding Mineral Resources and Mineral Reserves
Readers should refer to the Company's current technical reports and other continuous disclosure documents filed by the Company available on Sedar at www.sedar.com for further information on the mineral resource estimates of the Company's projects, which are subject to the qualifications and notes set forth therein, as well as for additional information relating to the Company more generally. Mineral resources which are not mineral reserves, do not have demonstrated economic viability. Inferred mineral resources have insufficient confidence to allow the meaningful application of technical and economic parameters or to enable an evaluation of economic viability suitable for public disclosure. Neither the Company nor readers can assume that all or any part of an inferred mineral resource will be upgraded to indicated or measured mineral resource. Most projects at the inferred mineral resource stage do not ever achieve successful commercial production. Each stage of a project is contingent on the positive results of the previous stage and that there is a significant risk that the results may not support or justify moving to the next stage.
Quality Control and Quality Assurance
Prophecy Platinum executes a quality control program to ensure best practice in sampling and analysis. Samples are cut and split for assay with the remaining sample retained for reference. Blanks, Standard Reference Material (SRM), and duplicates were inserted into the sample stream every 20th sample. A duplicate sample is taken every 20th sample of core. The selected sample is sawn in half and then sawn in half again. The quartered core is then placed into two different sample bags with different sample numbers and sealed. The SRM material comes from Natural Resources Canada and Analytical Solutions Limited. These were inserted into the sample stream immediately after the second duplicate. The SRMs used are WMS-1a, WPR-1 and WGB-1. Sample Blanks are obtained from two sources; granodiorite from a local quarry and garden marble from hardware stores in Whitehorse, Yukon. A Blank sample is inserted into the sample stream after the SRM. Assayed samples are transported in sealed and secured bags for preparation at ALS Chemex Prep Lab located in Whitehorse, Yukon. Pulverized (pulp) samples are shipped for analysis to ALS Chemex Assay Laboratory in Vancouver, B.C. ALS Chemex is an ISO/IEC 17025:2005 accredited laboratory and registered under ISO 9001:2000.
Quality assurance and quality control are monitored using scatterplots, Thompson-Howarth plots and statistical analysis to ensure duplicates, blanks and standard data are reliable and indicate robustness of overall results. ALS Chemex quality-assurance procedures are also included in this process."