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Jul 21, 2017 2:53 PM EST
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July 21, 2017
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Wellgreen Platinum Announces Updated Resource Estimate

06/26/2017

TSX:  WG
OTC-QX:  WGPLF

VANCOUVER, June 26, 2017 /CNW/ - Wellgreen Platinum Ltd. ("Wellgreen") is pleased to report the results of its recently completed mineral resource estimate (the "2017 Resource Estimate") for its 100%-owned Wellgreen Ni-PGM-Cu project in the Yukon Territory, Canada ("Wellgreen Project").

Since the publication of the July 24, 2014 mineral resource estimate, an additional 74 drill holes were completed during four drill programs from 2013 through to 2016. These drill holes and assay data were incorporated into the new geologic model and 2017 Resource Estimate. The result of the additional drilling contributed to an approximate 10% increase in the Measured and Indicated classes of mineralization. By comparison to the 2014 resource model, if the metal prices, costs and recoveries used in the 2014 resource estimate were applied to the 2017 model, there would have been an approximate 25% increase in the Measured and Indicated Resources. However, lower US dollar metal prices, additional metallurgical testwork, which revealed lower recoveries (see news release dated March 1, 2017), and operating cost updates have partially offset some of the gains in tonnage, so the net increase in the tonnage of Measured and Indicated mineralization from 2014 to 2017 is approximately 10% at similar grades.

The Inferred class of mineralization declined in tonnage by approximately 86%, but increased the grade of nickel by 20% and decreased the grade of copper by approximately 14% due to the following reasons:

  • Additional drilling combined with the revised geologic interpretation resulted in establishing boundaries of mineral bearing rock types that were previously reported as open. The result is physically less mineral bearing rock that can host mineralization.
  • Inferred mineral resource estimation in the 2017 Resource Estimate utilized a search radius based on the statistical range of influence derived from variography as measured by the Qualified Person. Previous estimates of the Inferred mineralization applied larger search radii.
  • Changes to metallurgical recoveries and processing costs also impacted the Inferred category by increasing cut-off grades in Net Smelter Return ("NSR") terms. This contributed to the loss of tonnage and an increase in reported inferred nickel grade.

Near-surface peridotite hosted mineralization however, remains open to the south in certain areas of the deposit.  Higher-grade mineralization remains open at depth below the eastern end of the resource pit and mineralized intercepts remain open to the east. These areas will be the target of future exploration drilling.

Diane Garrett, President and CEO commented "Over the past 12 months we have taken the level of scientific testwork on the Wellgreen Project far beyond the Preliminary Economic Assessment ("PEA") stage and have a much better understanding of the deposit through that work. Amongst the knowledge gained is the identification of future exploration drill targets at Wellgreen and regionally within our land holdings, understanding how the material will perform in the process plant, potential smelters and shipping routes for our product and smelting and refining terms for our quality of concentrate. As we move the project forward we will be looking to produce an even higher-grade quality bulk concentrate as well as attempting to produce separate nickel and copper concentrates. Our work thus far indicates separate concentrates could significantly improve the overall potential economics of the project and that work is intended to begin in the fall of 2017 and to be completed prior to the release of a new PEA or advancing to a pre-feasibility study ("PFS"), as this information is expected to change the pit shape, mine plan and other factors."

The Company notes that while it demonstrated the viability of nickel copper separation in its Phase 1 Metallurgical Test Program (see news release dated March 1, 2017), the next step is to physically produce separate concentrates. The Company intends to complete the Phase 2 Metallurgical Test Program utilizing the mini pilot plant at XPS labs in Sudbury, Ontario.

Table 1 summarizes the 2017 Mineral Resources at the Wellgreen Project. The economic cut-off is reported in terms of NSR in US$/tonne. The Company believes that reporting NSR is a more appropriate method of reporting a polymetallic deposit than on a platinum or nickel equivalent basis. The change to NSR cut-off provides the basis to include benefits from all economic metals, alleviates the potential confusion of equivalent metal calculations and is a commonly accepted practice in the industry.

Readers are cautioned that mineral resources are not mineral reserves and do not have demonstrated economic viability.  Readers are also cautioned that inferred resources are considered too speculative geologically to have economic considerations applied to them.

Table 1 details metal price assumptions based on the consensus long term metal price forecasts by various banks and commodity trading firms.  Mining, smelting, refining and transportation costs were derived through internal work necessary for the resource estimation and are expected to become part of a future PEA or PFS.

A considerable amount of technical work has been performed on the Wellgreen Project over the past 12 months. Due to the changes in the resource estimate, improved understanding of the geologic model, current work underway on relocation of the plant and tailings facilities and other factors that have changed since the publication of the PEA filed on SEDAR by the Company on March 19, 2015 (the "2015 PEA"), the Company advises that the 2015 PEA has become outdated and should not be relied upon. The Company intends to publish a new technical report within 45 days of this news release which will consist of the 2017 resource estimate.  Additional mine planning studies remain underway.

Table 1

Wellgreen Project

Mineral Resources

June 2017


Mineral Resources, US $13.85/tonne NSR Cut-off

Prices, US$ 

----->

$7.75

$3.00

$11.80

$1,350

$860

$1,400


Contained Metal

/lb

/lb

/lb

/oz

/oz

/oz


Ni

M Lbs

Cu

M Lbs

Co

M Lbs

Pt

K Ozs

Pd

K Ozs

Au

K Ozs

Class

Ktonnes

Ni %

Cu%

Co%

Pt g/t

Pd g/t

Au g/t

Measured

98,800

0.25

0.16

0.015

0.253

0.243

0.051


544

356

33

805

773

160

Indicated

263,200

0.26

0.13

0.015

0.223

0.244

0.036


1,531

733

88

1,887

2,067

308

Total M+I

362,000

0.26

0.14

0.015

0.231

0.244

0.040


2,075

1,089

121

2,692

2,840

468

Inferred

118,600

0.28

0.12

0.015

0.217

0.253

0.032


741

312

40

829

964

124

Notes

Average grade calculations on Table 1 are impacted by rounding.
Tonnages are reported in units of 1,000 metric tonnes (Ktonnes).
Contained Base Metal reported in units of 1,000,000 lbs (M Lbs).
Contained Precious Metal reported in units of 1,000 troy ounces (K Ozs).
Average Strip ratio: 2:22 to 1

Metal Prices for Resource Determination in US$

Nickel: $7.75/lb; Copper: $3.00/lb; Cobalt: $11.80/lb; Platinum: $1,350/troy oz; Palladium: $860/troy oz; Gold: $1,400/troy oz.

Mining and Processing Costs in US$

Exchange Rate: $1.00 CDN = $0.78 US
Mining costs, vary by bench, separately for ore and waste.
Average mining costs for ore and waste within the resource pit: $1.85/tonne of total material moved.
Processing plus General and Administration: $13.85/tonne Ore.
Process recoveries, to bulk concentrate, vary by rock type for all metals and head grade for copper and nickel.

The average calculated process recoveries for the metals in the mineral resource are:
Ni: 59.2%; Cu: 77.7%; Co: 60.9%; Pt: 53.3%; Pd: 60.4%; and Au: 78.3%

Smelting, refining, freight, and royalty costs vary by rock type and metal. The average of these calculated costs in US$ are:
Ni: $3.25/lb; Cu: $1.81/lb; Co: $7.71/lb; Pt: $692/troy oz; Pd: $441/troy oz; and Au: $1,342/troy oz

Overall slope angles vary from 38 to 42 degrees depending on the geotechnical domain

_______________

Mineral resource classification was determined based on the number of drill holes, number of composites, and the average distance of composites to the estimated block. Classification was completed, by reference to the definitions within NI 43-101 and the CIM Definition Standards.

A computer-generated pit geometry was developed by AGP Mining Consultants, Inc. using the Lerchs-Grossman algorithm. John Marek of Independent Mining Consultants ("IMC") has verified the results using the floating cone algorithm and has confirmed that the resource pit has reasonable prospects of economic extraction.

Mine Planning Activities

The current concept for the project envisions a large-scale process facility generating and marketing a bulk nickel concentrate over the mine life, which is currently in excess of 20 years based on the updated mineral resources described in this news release. However, the work to be initiated in 2017 will include examining the viability of producing separate nickel and copper concentrates and the impact such separation might have on both the mine plan and potential economics of the project. In order to capture the potential economic contributions of multiple metals and head grade / process recovery formulae, an NSR grade has been estimated for each mineralized block and used for cut-off application. As the NSR value considers process recoveries, assumed smelter terms and concentrate transport costs, the break-even mill cut-off is equal to the sum of the process, G&A and tailing management operating costs. 

The Company has been working with AGP Mining Consultants on the overall mine design and plan including throughput rates for mining, facilities locations, etc.

Quality Assurance, Quality Control

Wellgreen retained IMC of Tucson, Arizona to complete the 2017 Resource Estimate. IMC has experience in base metals, precious metals and industrial minerals and has been retained by more than 250 mining companies and completed work on over 500 mining projects worldwide over the past 30 years. John Marek, President of IMC, is the Qualified Person on the Wellgreen Project pertaining to resource estimation.

The technical information disclosed in this news release was reviewed and approved by John Marek of IMC, RM-SME., who is a "Qualified Person" as defined in NI 43-101 – Standards of Disclosure for Mineral Projects, and an independent consultant to the Company.

Mr. Marek has verified the data disclosed in this news release and no limitations were imposed on the verification process. In the course of data verification, and for purposes of QA/QC, Mr. Marek, among other things, reviewed or developed the following types of information for the deposit:

  • Geologic maps and sections
  • Sampling procedure and assaying methods
  • QA/QC protocols and results, including:
    • Analysis of inserted standards
    • Analysis of inserted blanks
    • Confirmation of assays from a check lab
    • Reverse Circulation versus Diamond Drilling
    • ¼ core sampling and assay versus ½ core sampling and assay
    • Spot checks of the data base against original certificates of assay
  • Statistical evaluations and studies
  • Checked reliability of historic information and established protocol for acceptance or rejection of legacy data
  • Block model methods, parameters, tabulations, and model results
  • Estimated mining and process costs
  • Resource determination procedures and results to assure reasonable expectation of economic extraction

Other than as described below and in the Company's annual filings (which are available at www.sedar.com), 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.

Cautionary Note Regarding Forward Looking Information: This news release includes certain information that may be deemed "forward-looking information". Forward-looking information can generally be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "continue", "plans" or similar terminology, or negative connotations thereof. All information in this release, other than information of historical facts, including, without limitation, the size and scale of the Wellgreen deposit, future exploration and development of the Wellgreen project, the undertaking of future activities and work programs at the Wellgreen project, realization of the potential of the Wellgreen deposit, the active advancement of the Wellgreen project, and general future plans and objectives for the Company and the Wellgreen project, including completion of the Phase 2 Metallurgical Test Program, a PEA or PFS, and mine planning, including planned facilities locations, are forward-looking information that involve various risks and uncertainties. Although the Company believes that the expectations expressed in such forward-looking information are based on reasonable assumptions, such expectations are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking information. Forward-looking information is based on a number of material factors and assumptions. Factors that could cause actual results to differ materially from the forward-looking information include changes in project parameters as plans continue to be refined, future metal prices, availability of capital and financing on acceptable terms, general economic, market or business conditions, uninsured risks, regulatory changes, defects in title, availability of personnel, materials and equipment on a timely basis, accidents or equipment breakdowns, delays in receiving government approvals, the Company's ability to maintain the support of stakeholders necessary to develop the Wellgreen project, unanticipated environmental impacts on operations and costs to remedy same, and other risks detailed herein and from time to time in the filings made by the Company with securities regulatory authorities in Canada. Mineral exploration and development of mines is an inherently risky business. Accordingly, actual events may differ materially from those projected in the forward-looking information. For more information on the Company and the key assumptions, risks and challenges with respect to the forward looking information discussed herein, and about our business in general, investors should review our most recently filed annual information form, and other continuous disclosure filings which are available at www.sedar.com. Readers are cautioned not to place undue reliance on forward-looking information. The Company does not undertake to update any forward looking information, except in accordance with applicable securities laws.

SOURCE Wellgreen Platinum Ltd.

Wellgreen Platinum Contacts: Diane Garrett, President & Chief Executive Officer, 1-416-304-9318, dgarrett@wellgreenplatinum.com, info@wellgreenplatinum.com