Westhaven Announces Updated Preliminary Economic Assessment FOR the Shovelnose GOLD Project, British Columbia After-Tax NPV Doubled to $454 Million After-Tax IRR of 43.2% Payback of Initial Capital Costs of 2.1 Years
WESTHAVEN ANNOUNCES UPDATED PRELIMINARY ECONOMIC ASSESSMENT
FOR THE SHOVELNOSE GOLD PROJECT, BRITISH COLUMBIA
AFTER-TAX NPV DOUBLED TO $454 MILLION
AFTER-TAX IRR OF 43.2%
PAYBACK OF INITIAL CAPITAL COSTS OF 2.1 YEARS
All amounts are in Canadian Dollars unless otherwise noted
Vancouver, B.C. – March 3 rd, 2025 – Westhaven Gold Corp. (TSX-V:WHN) is pleased to report the
completion of an Updated Preliminary Economic Assessment (“PEA”) at its 100% owned 41,634-hectare
Shovelnose Gold Property (the “Property”) located within the prospective Spences Bridge Gold Belt
(“SBGB”), which borders the Coquihalla Highway 30 kilometres south of Merritt, British Columbia. The
PEA outlines a robust, low-cost, rapid pay-back, high margin, 11.1 year underground gold mining
opportunity and is based on updated mineral resources that include contributions from the South, Franz
and FMN zones.
At a gold price of US$2,400/oz and an exchange rate of C$1.00 to US$0.72, the Shovelnose base case
estimate (the "Base Case") generates an after-tax net present value (NPV) at a 6% discount rate of $454
million and an internal rate of return (IRR) of 43.2%. The proposed mine will operate over an initial 11.1
year mine-life with average annual life-of-mine gold production of 56,000 ounces. Initial capital
expenditure to fund construction and commissioning is estimated at $184 million, with a life-of-mine
capital cost of $379 million and a payback period of 2.1 years. The all-in sustaining costs (as defined per
World Gold Council guidelines, less corporate G&A) are estimated to be US$836 per ounce of gold
produced.
Summary Table - Economic Sensitivity to Long Term Gold Price
Long Term Metal Price
Variability
Corresponding
Gold Price
After Tax NPV
(at 6%)
After Tax
IRR
(percentage change) US$/ounce CDN $ millions (%)
- 20% 1,920 284.3 30.4
- 10% 2,160 369.1 36.9
base case 2,400 453.7 43.2
+ 10% 2,640 538.3 49.5
+ 20% 2,880 622.8 55.7
TSX-V:WHN
Gareth Thomas, President & CEO, comments: “Westhaven’s flagship Shovelnose Gold Property is ideally
situated, in close proximity to roads, power and infrastructure in a tier 1 mining jurisdiction. Production
contribution from both Franz and FMN provide valuable ounces that bring gold production forward in the
schedule resulting in payback of initial capital costs in just 2.1 years. Our intention is to continue to
advance this cornerstone project in parallel with our ongoing exploration efforts to further expand the
gold-silver mineral inventory on this highly prospective land package. The next steps towards rapidly
advancing development include further de-risking initiatives such as continued environmental baseline
studies, permitting requirements, along with other cost and technical requirements.”
The Company cautions that the results of the PEA are preliminary in nature and include Inferred Mineral
Resources that are considered too speculative geologically to have economic consideration applied to
them to be classified as Mineral Reserves. There is no certainty that the results of the PEA will be
realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
Preliminary Economic Assessment Highlights:
*Base case parameters of US$2,400 per ounce gold, US$28 per ounce silver and CDN$/US$ exchange rate of $0.72.
*All costs are in Canadian dollars unless otherwise specified.
Robust financial metrics.
o Pre-tax Internal Rate of Return (“IRR”) of 56.3%; After-tax IRR of 43.2%.
o Low All-In Sustaining Cost (“AISC”) of $1,161/ounce (“oz”) (US$836/oz) gold equivalent
(“AuEq”).
o Low Cash Cost of $872 oz/AuEq (US$ 628/oz AuEq).
o Pre-tax Net Present Value (“NPV”6%) of $730 million (M) and After-tax NPV of $454M.
o Payback period from start of production year at 1.7 years pre-tax and 2.1 years after-tax.
o After-tax (NPV 6%) increases to $634M and After-tax IRR increases to 56.6% using spot
prices of US$2,900 gold and US$30 silver.
Low capital-intensive development and operating costs.
o Total Preproduction Capital of $184M.
o Total Life of Mine (“LOM”) Capital Costs of $379M.
o Average operating cost of $142/ tonne processed.
o 92% of total stope mining is cost effective longitudinal and traverse longhole stoping, with
only 8% of total mining requiring cut and fill stoping.
11.1-year mine life and ability to expand processing to accommodate satellite discoveries.
o 718,600 total Indicated ounces gold equivalent (“AuEq”) underground Mineral Resource
Estimate.
292,000 total Inferred ounces AuEq underground Mineral Resource Estimate.
o Production rate of 1,000 tonnes per day (“tpd”).
o Total payable metals of 637,000 oz gold (“Au”) and 3,562,000 oz silver (“Ag”).
o Average annual production of 56,000 oz Au peaking in year 7 at 68,000 oz Au.
Total mineralized rock production of 4,159,000 tonnes at 5.26 g/t Au and 32 g/t Ag.
o Metallurgical recoveries of 91.5% Au and 92.9% Ag.
Community/stakeholder benefits.
o Total projected income taxes paid of $284M.
o Total projected British Columbia mineral taxes paid of $163M.
o More than 130 well-paying local full time jobs created during life of mine.
o Additional employment during construction phase.
o Indirect spin-off benefits during both construction and mine operations.
Mineral Resources, Updated PEA Preparation and Results
The previous public Mineral Resource Estimate (“MRE”) for the South Zone was carried out by P&E
Mining Consultants Inc. (“P&E”) with an effective date July 18, 2023. The current underground MRE is
reported herein. All drilling and assay data were provided by Westhaven, in the form of Excel data files.
The GEOVIA GEMS™ V6.8.4 database compiled by P&E for the February 28, 2025 MRE consisted of 355
surface drill holes, totalling 121,971 metres. A total of 145 drill holes (50,714 metres) were intersected
by the Mineral Resource wireframes used in this PEA.
P&E validated the Mineral Resource database in GEMS™ by checking for inconsistencies in analytical
units, duplicate entries, interval, length or distance values less than or equal to zero, blank or zero-value
assay results, out-of-sequence intervals, intervals or distances greater than the reported drill hole length,
inappropriate collar locations, survey and missing interval and coordinate fields. Some minor errors were
identified and corrected in the database. The QPs are of the opinion that the supplied database is
suitable for Mineral Resource estimation.
Block models were constructed using GEOVIA GEMS™ V6.8.4 modelling software and consist of separate
model attributes for estimated Au, Ag and AuEq grade, rock type (mineralization domains), volume
percent, bulk density, and classification. The Mineral Resource was classified as Indicated and Inferred
based on the geological interpretation, variogram performance and drill hole spacing. The QPs also
consider mineralization at the South, Franz and FMN Zones to be potentially amenable to underground
mining methods. The revised MRE used for this Updated PEA is reported with an effective date of
February 28, 2025 and is tabulated in Table 1.
Table 1
Shovelnose Underground Mineral Resource Estimate @ 1.3 g/t AuEq Cut-off (1-7)
Classification Zone Tonnes Au Contained
Au Ag Contained Ag AuEq Contained AuEq
(k) (g/t) (k oz) (g/t) (k oz) (g/t) (k oz)
Indicated
South 3,107 6.18 616.8 33.1 3,302.8 6.56 655.2
Franz 89 7.44 21.2 30.9 88.0 7.80 22.2
FMN 241 5.07 39.2 22.5 173.7 5.33 41.2
Total 3,437 6.13 677.2 32.3 3,564.5 6.50 718.6
Inferred
South 1,386 3.79 168.6 16.5 736.8 3.98 177.2
Franz 63 3.48 7.1 51.9 105.4 4.09 8.3
FMN 843 3.49 94.6 37.5 1,017.3 3.93 106.5
Total 2,292 3.67 270.3 25.2 1,859.5 3.96 292.0
1. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
2. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing,
or other relevant issues.
3. The Inferred Mineral Resource in this estimate has a lower level of confidence than that applied to an Indicated Mineral Resource and must
not be converted to a Mineral Reserve. It is reasonably expected that the majority of the Inferred Mineral Resource could potentially be
upgraded to an Indicated Mineral Resource with continued exploration.
4. The Mineral Resources were estimated in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards
on Mineral Resources and Reserves, Definitions (2014) and Best Practices Guidelines (2019) prepared by the CIM Standing Committee on
Reserve Definitions and adopted by the CIM Council.
5. PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic
considerations applied to them that would enable them to be classified as Mineral Reserves, and there is no certainty that the PEA will be
realized.
6. The AuEq cut-off of 1.3 g/t was derived from costs of C$82/t mining, C$42/t processing and $18/t G&A. A USD:CDN exchange
rate of 0.72 along with US$2,400/oz Au and US$28/oz Ag with respective process recoveries of 91.5% and 92.9%.
7. The Au/Ag ratio used was 86:1.
A financial model was developed to estimate the Life of Mine (“LOM”) plan and considered only
underground mining of Mineral Resources at the South, Franz and FMN Zones. Other known gold-silver
mineralization at the Shovelnose Gold Property, currently being evaluated by Westhaven, are not
included.
The LOM plan covers a 13.1-year period (2 years pre-production and 11.1 years of production). Currency
is in Q1 2025 Canadian dollars unless otherwise stated. Inflation has not been considered in the
financial analysis.
The Updated PEA outlines a production mine life of 11.1 years with average annual production of 56,000
ounces gold and 312,000 ounces silver at average respective cash costs and all-in sustaining costs
("AISC") per ounce gold equivalent of $1,161(US$836). The PEA considers the payable recovery of
637,000 oz gold and 3,562,000 oz silver from an underground operation, at average respective mine
production grades of 5.26 g/t and 32 g/t.
Revenue
The commercially saleable product generated by the Project is a gold/silver doré. Westhaven would be
paid once the doré has been delivered to a smelter and refinery, off-site.
The NSR payables were based on the following parameters:
Dore Payable (Includes refining and smelting)
Au 99%
Ag 90%
The CDN$/US$ exchange rate used in the PEA is 0.72.
Subtotal Revenue
Au (US$) $1,529M
Ag (US$) $100M
Net revenue
CDN$ $2,201M
The revenue generation by the Shovelnose Project, on a yearly basis, is presented in Table 2.
Table 2
Summary of Base Case Total Revenue Generation
Item / Year Yr -1 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Yr 12 Total
Tonnes (k) 133.7 330.4 367.5 365.3 365.3 365.3 365.3 365.3 365.3 365.3 365.3 365.3 40.0 4,158.8
Grade (g/t) - Au 3.98 5.43 4.94 5.52 5.16 5.55 5.59 6.35 5.24 5.05 5.42 4.26 3.93 5.26
- Ag 27 26 73 32 25 29 36 32 23 25 29 23 25 32
Au koz Payable 15.5 52.2 52.8 58.7 54.8 59.0 59.4 67.6 55.8 53.8 57.6 45.3 4.6 637.2
Ag koz Payable 98.1 232.9 722.4 310.0 242.0 282.3 352.4 316.4 222.8 244.8 287.4 223.6 26.6 3,561.8
Subtotal Rev.-Au (US$)M 37.2 125.4 126.8 140.8 131.6 141.7 142.6 162.2 133.9 129.0 138.3 108.8 11.0 1,529.3
-Ag (US$)M 2.7 6.5 20.2 8.7 6.8 7.9 9.9 8.9 6.2 6.9 8.0 6.3 0.7 99.7
Subtotal Rev. (Cdn$) M 55.4 183.2 204.3 207.6 192.2 207.8 211.8 237.6 194.6 188.8 203.2 159.8 16.3 2,262.5
Net Royalty (Cdn$) M 5.9 4.6 5.1 5.2 4.8 5.2 5.3 5.9 4.9 4.7 5.1 4.0 0.4 61.1
Net Revenue (Cdn$) M 49.5 178.6 199.1 202.4 187.4 202.6 206.5 231.7 189.7 184.0 198.2 155.8 15.9 2,201.4
Note Yr = Year
The QPs have estimated the net revenues assuming Westhaven has taken advantage of available royalty
buy-outs. There is a 2% Net Smelter Return (“NSR”) royalty on the Shovelnose Gold Property held by
Franco-Nevada Corp. which Westhaven has the option to buy down to a 1.5% NSR for US$3M. There is a
2% NSR held by Osisko Gold Royalties Ltd. which Westhaven has the option to buy down to a 1% NSR for
$500,000.
Costs
Operating costs:
Total average cost $142/t processed
Cash Cost / AuEq oz (Cdn$/oz AuEq) $872/oz AuEq (US$628/oz)
All-in sustaining cost (“AISC”)(Cdn$/oz AuEq) $1,161/oz AuEq (US$836/oz)
Capital costs:
LOM $379M
Sustaining CAPEX $195M
LOM capital costs include the cost of all mine development; process plant, mine equipment; surface
infrastructure; underground infrastructure; a closure cost; a salvage credit; and a 20% contingency.
Stoping methods utilized are transverse longhole, longitudinal longhole and cut & fill. The average vein
widths to be mined are 16.2m, 6.6m and 3.0m respectively.
Mining unit costs by method are $143.81/t for transverse, $144.94 for longitudinal long hole, and
$142.82/t for cut & fill stoping.
The proportion of mining method during the life of mine is 65% longitudinal longhole, 27% for
transverse longhole mining and 8% cut and fill.
Table 3
Base Case Cash Flow Summary
ITEM DESCRIPTION / YEAR UNITS YR
- 2
YR
- 1
YR
1
YR
2
YR
3
YR
4
YR
5
YR
6
YR
7
YR
8
YR
9
YR
10
YR
11
YR
12 TTL
Production
kt 134 330 368 365 365 365 365 365 365 365 365 365 40 4,159
Au
(g/t) 3.9 5.4 4.9 5.5 5.2 5.6 5.6 6.4 5.2 5.1 5.4 4.3 3.9 5.3
Ag
(g/t) 27 26 73 32 25 29 36 32 23 25 29 23 25 32
Revenue M$ 50 179 199 202 187 203 206 232 190 18
4 198 156 16 2,201
Opex
Expensed Stope
Development (Contractor) M$ 11 6 11 13 9 2 6 2 9 3 9 5 1 88
Longitudinal LH Stoping M$ 1 3 3 2 3 3 2 2 2 3 3 4 0.4 30
Transverse LH Stoping M$ 1 2 1 1 2 2 2 1 12
Cut and Fill Stoping M$ 1 2 0.2 1 0.1 1 1 1 1 0.1 7
Mine G&A M$ 3 5 5 5 5 5 5 5 5 5 5 5 1 62
Paste Backfill M$ 1 1 2 3 3 3 3 3 3 3 3 3 1 34
Process Plant M$ 6 14 15 15 15 15 15 15 15 15 15 15 2 173
Transport and Place
Tailings M$ 1 12 2 1 1 1 1 1 1 1 1 1 0.1 12
U/G Ore Haulage M$ 1 4 6 8 8 8 8 9 8 7 8 8 1 84
Surface Ore Haulage M$ 1 1 1 3
Backhaul Paste Backfilll to
FMN M$ 0.1 0.4 0.2 1
Stopckpile Rehandling M$ 1 1 1 1 1 1 1 1 1 1 1 1 0.1 14
G&A M$ 6 6 6 6 6 6 6 6 6 6 6 1 71
Total Opex with
Contingency M$ 25 45 55 58 53 47 50 47 4 47 53 50 6 589
Capex
Mine Development
(Contractor) Waste M$ 19 21 38 16 9 6 1 6 1 8 3 126
Process Plant M$ 50 25 4 4 4 4 3 94
Owner's Cost M$ 3 5 8
Mining Equipment M$ 11 7 7 2 2 12 1 5 2 3 4 54
U/G Infrastructure M$ 1 2 1 1 1 1 1 1 1 1 1 13
Surface Infrastructure M$ 48 5 2 2 5 2 5 2 72
EPCM M$ 9 10 19
Closure & Salvage M$ 5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 -16 -6
Total Capex with
Contingency M$ 62 122 35 52 18 15 4 28 4 18 4 21 10 -16 379
Table 3
Base Case Cash Flow Summary
ITEM DESCRIPTION / YEAR UNITS YR
- 2
YR
- 1
YR
1
YR
2
YR
3
YR
4
YR
5
YR
6
YR
7
YR
8
YR
9
YR
10
YR
11
YR
12 TTL
Taxes
Income Tax M$ 11 25 24 23 30 31 38 27 28 30 21 -4 284
Mineral Tax M$ 0 3 3 12 16 20 17 24 16 18 17 13 3 163
Total Taxes M$ 0 14 28 37 39 50 48 62 43 46 47 34 0 447
After-Tax Cash Flow M$ -62 -97 85 63 90 80 102 80 118 75 87 77 62 26 785
After-Tax Cumulative Cash Flow M$ -62 -160 -75 -11 78 158 260 340 458 533 62
0 697 759 785
After-tax IRR % 43.2
After-tax NPV @ 6% M$ 454
Cash Flow Sensitivity Analysis
The following after-tax cash flow analysis was completed:
Net Present Value (“NPV”) (at 5%, 6%, 7%, 8%, 9% and 10% discount rates).
Internal Rate of Return (“IRR”).
Payback period.
The summary of the results of the cash flow sensitivity analysis is presented in Table 4
TABLE 4
BASE CASE CASH FLOW SENSITIVITY ANALYSIS
Description Discount Rate Units Value
Undiscounted After-Tax CF 0% (M$) 785
Internal Rate of Return % 43.2
After-Tax NPV at
5% (M$) 496
Base Case 6% (M$) 454
7% (M$) 415
8% (M$) 380
9% (M$) 348
10% (M$) 319
After-Tax Total Project Payback (including pre-production) Years 4.1
The Project was evaluated on an after-tax cash flow basis which generates a net undiscounted cash flow
estimated at $785M. This results in an after-tax IRR of 43.2% and an after-tax NPV of $454 M when
using a 6% discount rate. In the base case scenario, the Project has a payback period of 4.1 years from
the start of the Project. The average life-of-mine cash cost is $872/oz AuEq (US$628/oz AuEq), at an
average operating cost of $142/t processed. The average life-of-mine all-in sustaining cost (“AISC”) is
estimated at $1,161/oz AuEq (US$836/oz AuEq).
Sensitivity Analysis
Project risks can be identified in both economic and non-economic terms. Key economic risks were
examined by running cash flow sensitivities to: gold metal price; silver metal price; gold process plant
head grade; gold metallurgical recovery; operating costs; and capital costs.
Each of the sensitivity items were varied up and down by 10% and 20% to assess the effect they would
have on the NPV at a 6% discount rate. The value of each parameter, at 80%, 90%, 100% base case,
110% and 120%, is presented in Table 5.
Table 5
NPV Sensitivity Parameter Values
Parameter 80% 90% 100% 110% 120%
Au Metal Price US$/oz 1,920 2,160 2,400 2,640 2,880
Ag Metal Price US$/oz 22.40 25.20 28.00 30.80 33.60
Au Head Grade g/t 4.21 4.73 5.26 5.79 6.31
Au Met Recovery % N/A 82.4% 91.5% N/A N/A
Capex $M 304 342 379 417 455
Opex $M 471 530 589 648 707
The resultant after-tax NPV @ 6% values of each of the sensitivity parameters at 80% to 120% are
presented in Table 6.
Table 6
After-Tax NPV Sensitivity to Base Case at 6% Discount Rate (M$)
Parameter 80% 90% 100% 110% 120%
Au Metal Price 284 369 454 538 623
Ag Metal Price 442 448 454 459 465
Au Head Grade 284 369 454 538 623
Au Met Recovery N/A 369 454 N/A N/A
Capex 515 484 454 423 392
Opex 502 478 454 429 405