Multi-million ounce gold discoveries in safe jurisdictions are becoming almost as rare as Cubs’ World Series Wins. Tberefore, when one comes across a nearly 2,000,000 gold equivalent ounce resource grading above 5 grams/tonne in the Canadian Yukon it’s time to take a closer look. Rockhaven Resources’ 100% owned Klaza Deposit in the Canadian Yukon is exactly such a deposit; Klaza has the potential to be an attractive acquisition target for a major with a nearly 10 million tonne inferred resource grading 4.48 grams/tonne gold (1.36 million ounces gold), 89 grams/tonne silver (27 million ounces silver), and over 350 million pounds of lead and zinc combined.
Located in a historic mining district with an operating mine and advanced deposits in close proximity, Klaza has the benefit of good infrastructure and road access right to their 100%-owned deposit. Rockhaven (TSX-V: RK) has also established a good working relationship with the local community and first nations and CEO Matthew Turner emphasized that Rockhaven is committed to growing these relationships and creating “win/win” opportunities in which everyone benefits.
An impressive amount of work has already been completed at Klaza which has outlined an economic gold resource at $1200/oz gold, however, the potential for additional exploration discoveries is what really makes Klaza an exciting gold resource from an investment standpoint. In fact, Rockhaven’s latest drill program at Klaza exceeded expectations including a hole which graded 17.01 g/t gold and 121 g/t silver over 4.32 meters. The best part is that the Klaza Deposit is open in all directions and boasts numerous untested soil and geophysical targets.
The March 2016 PEA (preliminary economic assessment) illustrated positive economics at Klaza (20% IRR and C$150 million pre-tax NPV at 5% discount rate) including a $115/gram gold operating cost which Rockhaven believes it can improve upon:
Infill drilling to better define areas of high-grade mineralization within the current resource area can help significantly reduce mining and processing costs at Klaza.
When asked about Rockhaven’s sole focus on the Klaza resource on a recent call CEO Matthew Turner stated:
“We are a one trick pony but we love the pony….Klaza already hosts the highest grade, plus one million ounce gold deposit ever discovered in the history of Yukon exploration and at the end of this year we hope to surpass 2,000,000 gold equivalent ounces at about 5 grams per tonne average grade.”
Klaza is an impressive resource that is located near road access in an historic mining district. The Rockhaven investment story can be summarized in three bullet points:
Cheapest valuation for ounces in the ground of any economic PEA gold deposit.
Highly leveraged to the price of gold.
Very low risk exploration with an uncommonly low discovery cost per ounce.
Most of the Klaza property has not seen systematic exploration.
Rockhaven’s vision is to continue to improve the economics at Klaza through additional exploration discoveries. When asked about his 2-3 year vision for Rockhaven Mr. Turner responded:
“With additional exploration success I’d love to see Klaza become a 3,000,000 ounce deposit (gold equivalent ounces) over the next couple of years. With road access, it’s location within a developed area and continued local and first nation support, Klaza only becomes more special compared with its peer group. Our commitment is to move Klaza forward to the point that the mine can’t not be built.”
Klaza is close to reaching “world class” gold resource status as Rockhaven continues to expand the size of this high-grade project in the one of the best mining jurisdiction on the planet. An additional 1-2 drill programs should go a long way towards achieving Rockhaven CEO Matthew Turner’s vision of upgrading Klaza to a 3,000,000 ounce resource at 5+ grams per tonne gold. At that point it will simply become a question of when and at what price a mid-tier or major producer comes in to acquire Rockhaven.
After nearly tripling during the first half of 2016 Rockhaven shares have consolidated in recent weeks. Despite the recent pullback there have been signs of accumulation in the last couple of weeks.
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