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Wellgreen Platinum Ltd
Symbol WG
Shares Issued 93,706,982
Close 2014-07-23 C$ 0.63
Market Cap C$ 59,035,399
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Wellgreen updates NI 43-101 resource for Wellgreen

2014-07-24 12:50 ET - News Release

Mr. Greg Johnson reports

WELLGREEN PLATINUM ANNOUNCES NEW RESOURCE ESTIMATE INCLUDING 5.5 MILLION OZ. PLATINUM, PALLADIUM & GOLD ("3E") IN M&I RESOURCES AND 13.8 MILLION OZ. 3E INFERRED AT ITS WELLGREEN PGM-NI-CU PROJECT

Wellgreen Platinum Ltd. has released a significantly expanded and upgraded National Instrument 43-101 mineral resource estimate for its 100-per-cent-owned Wellgreen PGM-Ni-Cu (platinum group metals-nickel-copper) project in Yukon, Canada.

Highlights:

  • Measured and indicated (M&I) mineral resources increased to 330 million tonnes at 1.67 grams per tonne platinum equivalent (PtEq) or 0.44 per cent nickel equivalent (NiEq) at a 0.57-gram-per-tonne PtEq cut-off or 0.15-per-cent NiEq cut-off in a pit-constrained resource containing 5.53 million ounces of 3E (platinum plus palladium plus gold) with 1,894 million pounds of nickel and 1,021 million pounds of copper (see detailed breakdown in an attached table);
  • Inferred mineral resource increased to 846 million tonnes at 1.57 g/t PtEq or 0.41 per cent NiEq at a 0.57-gram-per-tonne PtEq cut-off or 0.15-per-cent NiEq cut-off in a pit-constrained resource containing 13.8 million ounces of 3E with 4,431 million pounds of nickel and 2,595 million pounds of copper;
  • Higher-grade M&I mineral resource of 72 million tonnes at 2.49 g/t PtEq or 0.65 per cent NiEq at a 1.9-gram-per-tonne PtEq cut-off or 0.50-per-cent NiEq cut-off containing 2.13 million ounces of 3E with 527 million pounds of nickel and 462 million pounds of copper;
  • Higher-grade inferred mineral resource of 174 million tonnes at 2.41 g/t PtEq or 0.63 per cent NiEq at a 1.9-gram-per-tonne PtEq cut-off or 0.50-per-cent NiEq cut-off containing 5.06 million ounces of 3E with 1,182 million pounds of nickel and 1,153 million pounds of copper.

This new resource estimate, together with the updated metallurgical testing results anticipated to follow in August, will be incorporated into the 2014 preliminary economic assessment (PEA) for the Wellgreen project, targeted for completion in September, 2014. The company is fully financed through completion of the PEA update and to initiate prefeasibility-level studies.

Greg Johnson, Wellgreen Platinum president and chief executive officer, stated: "We are extremely pleased with the results of the new resource estimate, as it demonstrates the scale and potential of the Wellgreen deposit, which still remains open to further significant expansion downdip and along trend. The results of the drilling programs in 2012 and 2013 have dramatically expanded the previous 2012 Wellgreen project resources, with measured and indicated resources increasing to more than 330 million tonnes from 14 million tonnes and nearly doubling the inferred category resources to 846 million tonnes. This makes the Wellgreen project one of the largest, known undeveloped PGM resources with over 5.5 million ounces of 3E (platinum plus palladium plus gold) M&I resource and an additional 13.8 million ounces of 3E resources in the inferred category. The new modelling has also substantially increased the overall confidence level in the company's estimates, with the conversion of a high percentage of the prior inferred resources into the measured and indicated categories, including over 92 million tonnes into the measured resource level."

Mr. Johnson continued: "Within this pit-constrained resource is a significantly higher-grade component grading 2.49 g/t PtEq or 0.65 per cent NiEq containing 2.1 million ounces of 3E M&I resources and an additional inferred resource grading 2.41 g/t PtEq or 0.63 per cent NiEq containing 5.1 million 3E ounces. The higher-grade material is one of our priorities for focus in the initial mine planning in the ongoing PEA engineering.

"The new resource estimate is an important component for completion of the updated PEA, and will be followed by the conclusion of the metallurgical program and PEA engineering, which we expect to complete over the next two months. With the successful closing of our $6.9-million equity financing in June, the metallurgical and engineering programs are progressing well, and we look forward to providing additional updates in the weeks and months ahead."

Wellgreen is a polymetallic deposit with mineralization that includes the platinum group metals, platinum, palladium, rhodium and other rare PGM metals, along with gold, with the significant co-occurrence of nickel, copper and cobalt. Platinum equivalent and nickel equivalent values referred to in this release are intended to reflect total metal equivalent content in platinum or nickel for all of the metals using relative prices for each of the metals. Refer to an attached table for individual metal grades and the metal prices used to calculate PtEq and NiEq.

Wellgreen project mineral resource estimation parameters

The Wellgreen PGM-Ni-Cu project resource estimate was prepared by Ron Simpson, PGeo, of GeoSim Services Inc., an independent qualified person, and by John Sagman, PEng, Wellgreen Platinum's senior vice-president and chief operating officer, a qualified person, in accordance with the guidelines of the Canadian securities administrators' National Instrument 43-101 -- Standards of Disclosure for Mineral Projects.

The Wellgreen deposit consists of disseminated to semi-massive and massive sulphide layers within the Quill Creek ultramafic complex. The deposit is defined by 760 drill holes, which have tested approximately 2.5 kilometres of an approximately 20-kilometre-long system. The deposit averages 100 to 200 metres in thickness at surface in the Far West zone, and expands to 500 metres in thickness in the Central zone and to nearly a kilometre wide in the Far East zone, where the deposit remains open downdip and along trend (see cross-sections on the company's website).

The Quill Creek complex is defined by a steeply dipping, layered intrusion, which gradationally transitions from dunite to peridotite to clinopyroxenite to gabbro, with a corresponding increasing sulphide content through this sequence toward contact with the Paleozoic sedimentary country rocks. Mineralization within the main Wellgreen deposit has been delineated into six zones of massive and disseminated mineralization, known respectively as the Far East zone, East zone, Central zone, West zone, Far West zone and North Arm zone. The mineralization at Wellgreen is similar to gabbro-associated nickel deposits, such as those found in Noril'sk, Russia; Stillwater, Mont; and Sudbury, Ont., though it is unusual in comparison with the width of continuous disseminated mineralization and total PGM content.

The updated Wellgreen mineral resource estimate incorporates data derived from new drilling and historical reassaying conducted since 2012, which totalled nearly 40,000 metres. These data were used along with other available historical data, some of which was relogged, to develop a geologic model for the Wellgreen deposit that incorporates lithology, and uses wire frames that constrain massive sulphide mineralization and unmineralized zones. Block grades were estimated using inverse-distance-cubed (ID3) anisotropic searches and examined at various cut-off grades. The detailed results of the updated mineral resource estimate for the Wellgreen project are presented in an attached table. The base-case cut-off grade of 0.57 g/t PtEq or 0.15 per cent NiEq, and the higher-grade portion of the resource at a 1.9-gram-per-tonne PtEq or 0.50-per-cent NiEq cut-off are highlighted, and resource estimates at other cut-off grades that show the sensitivity of the resources to changes in the cut-off grade are available on the company's website.

The Wellgreen project mineral resource estimate is effective as of July 23, 2014.

                      MINERAL RESOURCE ESTIMATE BY CATEGORY 
           At a cut-off of 0.57 g/t PtEq or 0.15 per cent NiEq (base case)

            Tonnes                                                        PtEq     Ni
Category      000s  3E g/t  Pt g/t  Pd g/t  Au g/t   Ni %   Cu %   Co %    g/t   Eq %

Measured    92,293   0.550   0.252   0.246   0.052  0.260  0.155  0.015  1.713  0.449
Indicated  237,276   0.511   0.231   0.238   0.042  0.261  0.135  0.015  1.656  0.434
Total M&I  329,569   0.522   0.237   0.240   0.045  0.261  0.141  0.015  1.672  0.438
Inferred   846,389   0.507   0.234   0.226   0.047  0.237  0.139  0.015  1.571  0.412

                        CONTAINED METALS BY CATEGORY
      At a cut-off of 0.57 g/t PtEq or 0.15 per cent NiEq (base case)

                          Measured     Indicated     Total M&I      Inferred
Metal                     resource      resource     resources      resource

Platinum (000 ounces)          748         1,760         2,508         6,375
Palladium (000 ounces)         730         1,817         2,547         6,137
Gold (000 ounces)              154           322           476         1,275
Total 3E (000 ounces)        1,631         3,900         5,531        13,787
Nickel (M pounds)              528         1,366         1,894         4,431
Copper (M pounds)              315           706         1,021         2,595
Cobalt (M pounds)               31            79           110           275

                        MINERAL RESOURCE ESTIMATE BY CATEGORY 
                 At a cut-off of 1.9 g/t PtEq or 0.50 per cent NiEq

            Tonnes                                                        PtEq     Ni
Category      000s  3E g/t  Pt g/t  Pd g/t  Au g/t   Ni %   Cu %   Co %    g/t   Eq %

Measured    21,854   0.923   0.454   0.366   0.103  0.326  0.301  0.019  2.492  0.653
Indicated   50,264   0.919   0.455   0.373   0.090  0.334  0.286  0.019  2.493  0.653
Total M&I   72,117   0.920   0.455   0.371   0.094  0.332  0.291  0.019  2.493  0.653
Inferred   173,684   0.906   0.456   0.352   0.098  0.309  0.301  0.018  2.410  0.631

                        CONTAINED METALS BY CATEGORY 
              At a cut-off of 1.9 g/t PtEq or 0.50 per cent NiEq

                          Measured     Indicated     Total M&I      Inferred
Metal                     resource      resource     resources      resource

Platinum (000 ounces)          319           736         1,054         2,549
Palladium (000 ounces)         257           603           860         1,965
Gold (000 ounces)               73           146           219           548
Total 3E (000 ounces)          648         1,484         2,133         5,061
Nickel (M pounds)              157           370           527         1,182
Copper (M pounds)              145           317           462         1,153
Cobalt (M pounds)                9            21            30            68

Notes:

  1. The resource estimate was prepared by GeoSim Services, with an effective date of July 23, 2014.
  2. Measured resources used 50-metre drill spacing. Indicated resources used 50-metre drill spacing for massive sulphide and gabbro domains, and 100-metre drill spacing for clinopyroxenite and peridotite domains.
  3. Nickel equivalent (NiEq per cent) and platinum equivalent (PtEq g/t) calculations reflect total gross metal content using $8.35 (U.S.) per pound Ni, $3.00 (U.S.) per pound Cu, $13.00 (U.S.) per pound Co, $1,500 (U.S.) per ounce Pt, $750 (U.S.) per ounce Pd and $1,250 (U.S.) per ounce Au, and have not been adjusted to reflect metallurgical recoveries.
  4. Pit-constrained grade shells were determined using the following assumptions: metal prices in note 3 above; a 45-degree pit slope; assumed metallurgical recoveries of 70 per cent for Ni, 90 per cent for Cu, 64 per cent for Co, 60 per cent for Pt, 70 per cent for Pd and 75 per cent for Au; an exchange rate of $1.00 (U.S.) equals 91 cents; and mining costs of $2.00 per tonne, processing costs of $12.91 per tonne, and general and administrative charges of $1.10 per tonne (all expressed in Canadian dollars).
  5. Totals in the tables may not add due to rounding.
  6. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

The company expects to file a technical report with respect to this updated mineral resource estimate in August, 2014. In addition, the company intends to incorporate the results of the technical report into an updated preliminary economic assessment for the Wellgreen project, which is targeted for completion in September of 2014.

Quality assurance, quality control

The technical information disclosed herein was prepared under the supervision of John Sagman, PEng, Wellgreen Platinum's senior vice-president and chief operating officer, and Ron Simpson, PGeo, of GeoSim Services, each of whom is a qualified person as defined in NI 43-101. In addition, Mr. Sagman has reviewed and approved the technical information contained in this news release. Mr. Sagman has verified the data disclosed in this news release, and no limitations were imposed on his verification process. Other than as described in the company's annual filings (which are available on SEDAR), there are no known legal, political, environmental or other risks that could materially affect the potential development of the mineral resources at this point of time.

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