the first results from its metallurgical heap leach test program of the Doby George deposit at its Aura gold and silver project in Nevada.announced
The company reported an average gold extraction oxide mineralization of 69.3% from the agitated cyanidation bottle roll leach test work.
"The metallurgical test results that support heap leach gold recoveries of approximately 70% are in line with the extensive historical exploration and metallurgical test results generated by previous owners of the deposit," Western Exploration Chief Executive Officer Darcy Marud said. "The metallurgical heap leach test program will be used to support the preparation of a pre-feasibility study on the Doby George deposit in 2024, pursuant to which the company expects to update its existing mineral resource estimate and underline potentially robust project economics supported by surface outcrops and the recent metallurgical test results."
The company wants to grow Aura — made up of the Doby George, Wood Gulch, and Gravel Creek deposits — from a more than 1-million-ounce (Moz) gold and 10-Moz silver resource.
It is also looking to complete a preliminary economic assessment (PEA) for Gravel Creek, where previous drilling found grades up to 40.05 grams per tonne gold (g/t Au) and 1,951 g/t silver (Ag).
"The Aura gold-silver project in Nevada (is) one of the most attractive mining jurisdictions in the world," Fundamental Research Corp. analyst Sid Rajeev wrote. He rated the stock a Buy and gave it a fair value of CA$3.48 per share, compared to Monday's price of about CA$1.24 per share. "We believe WEX's primary strengths are its high-grade Doby George project with near-term production potential, a strong management/board, and Agnico Eagle's backing."
Agnico Eagle Mines Ltd. (AEM:TSX; AEM:NYSE) owns 16% of the company.
Gravel Creek and Wood Gulch account for 60% of the project's resources, Rajeev noted. Doby George accounts for the rest.
"Doby George’s resource (40% of total resources) is amenable to heap leach processing, indicating potential for relatively low OPEX/CAPEX," Rajeev wrote. "WEX is planning a resource expansion/step-out drill program, followed by a Pre-Feasibility (study or PFS) in 2024. We believe this deposit can be advanced to production quickly, at a low initial CAPEX (<US$50M). Based on its existing resource, we believe the project has potential to operate for nine years (40-50 Koz/year), at a relatively low OPEX (US$800/oz)."
The Catalyst: 'A Very Exciting Resource'
Marud said Doby George hosts 407,000 ounces gold (407k Au) in the indicated category (12.9k tonnes at 0.98 grams per tonne [g/t]) and 119k Au ounces in the inferred category (4.99k tonnes at 0.73 g/t).
The metallurgical heap leach test program was designed to determine the processing characteristics at Doby George, and the results showed positive results, the company noted.
Agitated cyanidation bottle roll test work was done on 46 composites generated from the 2022 drilling program that ranged in grade from 0.17 g/t Au to 9.38 g/t Au and averaged 2.36 g/t Au. Cyanide soluble gold-to-fire assay ratios (CN/FA) were generally above 80%, according to Western Exploration.
The oxide composites generally did not contain detectable sulfur. Composites from West Ridge Deep only contained approximately 0.07% to 0.2% sulfide sulfur.
Reagent consumption is expected to be low for commercial heap leaching, averaging 0.12 kg/ton for cyanide and 0.9 kg/ton for lime.
"Doby George is a very exciting resource for Western Exploration and we still have extensive exploration upside on the property, particularly at Gravel Creek where our 2023 drill program is focused," Marud said.
Good Potential for Heap Leach Processing
The company indicated the Doby George variability composites were amenable to agitated cyanidation treatment at the 80%-1.7 mm feed size, indicating good potential for heap leach processing. The highest gold recoveries of more than 70% were from the West Ridge oxide composites.
"Gold recoveries obtained from the West Ridge Oxide samples from drill holes DGC789, 790 and 791 ranged from 50.0% to 85.4% and averaged 71.4%," the company noted in a release. "Only four of the 28 composites gave gold recoveries below 65%. A single West Ridge-Deep oxide composite (hole DGC796) was tested. Gold recovery from that composite (68.2%) was comparable to the other oxide composites."
Doby George was where precious metals mineralization was initially discovered at the project in the 1960s, but it wasn't until the 1980s that Homestake Mining Co. discovered the Wood Gulch deposit.
The project is 100% owned by Western and is about 32 kilometers north of the Jerritt Canyon Mine.
It's in an under-explored area of Nevada, the largest gold producing state in the United States, accounting for 74% of the country's output in 2021, Rajeev pointed out.
Nevada said mining helped establish it as a state 150 years and is still its largest export industry.
Western Exploration is planning to conduct step out drilling at Doby George in the second of half this year, in addition to infill drilling and metallurgical studies for Gravel Creek's PEA.
Streetwise Ownership Overview*
"Management is aiming to advance Doby George to production first, while expanding/developing Gravel Creek and Wood Gulch," Rajeev wrote.
Ownership and Share Structure
About 74% of the company is owned by strategic investors, including Golkonda LLC, a syndicate of dozens of high-net-worth investors, which owns about 58% of the company, and Agnico, which owns 16%.
Management and directors own about 7%, and other institutions own about 10%, the company said.
The rest is retail.
Western Exploration has a market cap of CA$53.52 million and has about 31.5 million shares outstanding, 4.8 million of them free floating. It trades in a 52-week range of CA$2.40 and CA$0.96.
- Western Exploration Inc. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000. In addition, Western Exploration Inc. has a consulting relationship with Street Smart, in affiliation with Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Western Exploration Inc.
- Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
For additional disclosures, please click here.