Strong drilling results at Westhaven Gold‘s (TSXV: WHN; US-OTC: WTHVF) Shovelnose project in south-central British Columbia reinforce the main South zone deposit’s wide high-grades as the company starts a prefeasibility study (PFS).
Highlight hole SNR26-070 cut 54 metres grading 8.99 grams gold per tonne and 55 grams silver from 152 metres depth, including 23 metres at 17 grams gold and 111 grams silver, Westhaven reported Thursday. Hole SNR26-63 returned 42 metres grading 4.35 grams gold and 41 grams silver from 148 metres downhole. Shovelnose is about 330 km northeast of Vancouver.
“Resource in-fill drilling at the South Zone deposit is well underway and is delivering results consistent with our expectations,” Westhaven CEO Ken Armstrong said in a release. “Early drilling has focused on fully defining the northwestern and southeastern edges of the deposit, with initial gold and silver grades and widths confirming expected grades and continuity of mineralization in these areas.”
Westhaven shares gained more than 5% to 29¢ apiece on Thursday morning in Toronto, valuing the company at $75.2 million (US$55.1 million). The stock has traded in a 12-month range of 12¢ to 35¢.
PEA, Dundee tailwinds
The South zone results come just over one year after Westhaven released an updated preliminary economic assessment (PEA) for Shovelnose showing the underground project’s high value. That report helped draw the attention of Dundee (TSX: DC.A), which last December invested $85 million in the explorer, giving Dundee up to 60% interest in its projects.
Other notable intercepts include hole SNR26-61 that cut 12 metres at 3.34 grams gold and 24 grams silver from 142 metres depth, and SNR26-69 which returned 11.7 metres grading 3.89 grams gold and 25 grams silver from 161.1 metres depth, including 9.5 metres at 7.38 grams gold and 68 grams silver from 184.5 metres downhole.
The drilling is part of a 35,000-metre program aimed at updating the resource for the South zone and incorporating it into the PFS, expected in the second half of 2027.
Dundee finances PFS
Under the investment deal with Dundee, the developer is to pay at least $30 million in project costs, including 50,000 metres of drilling and work towards the PFS.
The updated PEA gave Shovelnose a post-tax net present value (at a 6% discount) of $454 million and an after-tax internal rate of return of 43.2%, with life-of-mine capital costs of $379 million. Those economics assume a gold price of US$2,400 per ounce. The payback period is pegged at 2.1 years.
The mine could produce 637,000 oz. gold and 3.5 million oz. silver over an 11.1-year life, with the ability to expand processing to integrate satellite discoveries.
Shovelnose hosts 3.4 million indicated tonnes grading 6.1 grams gold for 677,000 oz. contained gold and 32 grams silver for 3.5 million contained oz., according to the 2025 PEA. Inferred resources total 2.2 million tonnes at 3.6 grams gold for 270,000 oz. and 25 grams silver for 1.8 million contained ounces silver. South zone represents the majority of the resource in both categories.
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