The Klaza project in Canada’s Yukon is seen as an exploration play by some and as a development play by others. Here’s a look at what Rockhaven Resources has been up to on the property as of late.
The Klaza project in Canada’s Yukon is seen as an exploration play by some and as a development play by others, says Rockhaven Resources (TSXV:RK,OTCMKTS:RKHNF) CEO Matt Turner.
“Half the people think we’re a development story, half the people think we’re still an exploration story because we have a lot of exploration targets on the property,” he said during a presentation. The Investing News Network was able to visit the Klaza project as part of a media tour of mining exploration and development projects in Yukon this July, where we were able to see the camp and core shack as well as a drill in action.
Located 50 kilometers from the town of Carmacks and 100 kilometers southeast of Western Copper and Gold’s (TSX:WRN,NYSEMKT:WRN) Casino project, the Klaza property covers about 250 square kilometers of claims owned 100 percent by Rockhaven. Rockhaven bought the property in 2010 from ATAC Resources (TSXV:ATC) just after that company had discovered Carlin-type mineralization at the Nadaleen trend and had decided to focus on that.
According to Turner, it was Doug Eaton, president and CEO of Strategic Metals (TSXV:SMD), who suggested he take a look at Klaza.
“He approached me and said look, the Klaza property is up for sale. We were out there with Chevron (NYSE:CVX) back in the 80’s, and we found some interesting stuff … you should take a look at it,” Turner explained. “So I spent about a day looking through the data, and was able to pull a deal off with ATAC.”
To date, Rockhaven has conducted a little over 70,000 meters of drilling at the project, and has released two resource estimates and a preliminary economic assessment (PEA). The PEA showed a post-tax NPV of C$86 million at a 5 percent discount with an internal rate of return of 14 percent and a mine life of 14 years. The project currently has an inferred mineral resource estimate of 9.421 million tonnes grading 5.92 grams per tonne of gold equivalent.
“If you zoom out and look at the Yukon as a whole it’s actually the highest grade plus-1 million ounce gold deposit ever discovered in the Yukon,” Turner said.
However, Turner believes there’s still plenty of growth potential.
“When you look at the belt in general, we’re on the northwest part of the belt, and most of the exploration was down on the southeast corner,” he explained. “That’s where most exploration was focused since the early 40’s. In six exploration seasons we’ve identified probably about 10 times as much gold as they’ve ever found in 60 years or even identified in 60 years of exploration on that part of the belt.”
Indeed, Rockhaven announced the discovery of a new gold zone at Klaza on August 10th, marking the completion of the first phase of its current work program. The structure has been traced by drilling and trenching for 700 meters along strike, and to a depth of 200 meters down-dip.
Rockhaven has a $2 million budget for its work programs this year.
We took a helicopter in to Klaza, but the project is actually road-accessible. Turner also pointed out that there is plenty of infrastructure in place due to large placer mining operations that sit below the Klaza project.
“All of these things that we’ve had to deal with on other projects I’ve run, [there are] no helicopters, no fixed wing, none of that stuff. So our budget’s pretty good for what we get out of it,” Turner said.
As mentioned above, half of those following Rockhaven see Klaza as a development story, while half are drawn in by the exploration potential. Turner stated that he’s aiming to appease both sides with the current program.
“With this program we’ve got about 8,000 meters laid out. About half of that’s going to be focused on resource expansion and kind of testing some of our ideas on some of the secondary structures related to the main area, and then the other half is going to be focused on finding new zones and testing other ideas,” he said. “If it’s a development guy, they can live with the fact that we’re putting meters towards developing new zones because, again, the economics tell us that we need to increase the base case assumptions. So we need to produce more every year, and we need a higher throughput. And the easiest way for that to happen really, will be to find new zones”
Of course, the rise in the gold price this year isn’t hurting the economics of the project either — the PEA for Klaza, released in January 2016, used a base case gold price of US$1,200 per ounce, compared to $1,341 per ounce today.
All in all, it will be interesting to see what else Rockhaven manages to turn up at Klaza.
“It’s a pretty special deposit with a lot of room to grow, and that’s one of the focuses for this year,” Turner said.
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Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.