Vancouver – StrataGold (SGV-T) has been exploring the Dublin Gulch property for gold for several years but of late its focus at the site has shifted to tungsten, and now the junior has a positive preliminary economic analysis (PEA) for a tungsten deposit in the Yukon.
The report assessed the viability of an open-pit mine producing 3,000 tonnes of ore daily, with a strip ratio of 6.7 to 1. Following crushing and grinding, a gravity concentration circuit would recover 60 to 65% of the ore’s tungsten content while a subsequent flotation circuit would pick up another 20% to produce a WO3 concentrate. Tungsten-trioxide concentrates are converted into ammonium paratungstate (APT), the marketable form of tungsten; the PEA assumed an APT price of US$11.50 per lb.
Processing 3,000 tonne daily the facility would produce a total of 45,725 tonnes of tungsten trioxide concentrate with an average grade of 58% over an 11-year mine life. That works out to 2.65 million metric tonne units of tungsten trioxide.
Total capital costs to develop the project are estimated at US$76.1 million; the processing plant accounts for US$41.8 million of that amount. The development price tag also includes the cost of constructing a 20-km powerline to connect the project to the Yukon power grid. Once built, operating costs are expected to average US$38.12 per tonne processed or US$6.43 per lb. WO3 produced.
The analysis found that the Mar deposit could generate a 15.5% internal rate of return and carries a net present value of US$24 million, at an 8% discount rate.
The Mar deposit is located 350 km north of Whitehorse. A recent estimate pegged resources at 12.7 million indicated tonnes grading 0.31% WO3 plus 1.3 million inferred tonnes grading 0.3% WO3.
According to the authors of the PEA at SRK Consulting, the Mar tungsten deposit has “excellent opportunities for significant resource expansion.” The deposit is currently defined over an 800-metres strike and remains open in several directions; SRK recommends a diamond drilling program of almost 5,000 metres to test the north and south extensions as well as the downdip potential.
StrataGold’s share price stayed unchanged on the news at 2¢. The company has a 52-week trading range of 1.5¢ to 33¢ and has 184 million shares issued. In the Mar deposit PEA news release StrataGold says it “deems the equity markets all but closed with respect to financing near-term exploration and development activities.” The company is therefore exploring strategic alternatives to benefit shareholders and advance the deposit.
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