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Last updated 2/8/2015 at Noon



Wellgreen Platinum Ltd. Jan. 2 said an updated preliminary economic assessment for Wellgreen strengthens the company's vision that the southwestern Yukon Territory project has the potential to become one of the largest and lowest-cost open pit platinum group metals-nickel mines in the world.

The Wellgreen project is envisioned as a conventional open pit operation, with some selective higher grade underground mining.

Milling would start at 25,000 metric tons per day for the first five years of operation, then would scale up to 50,000 tpd for an additional 20 years.

Under the base case of the 2015 PEA, the mill would produce a nickel-copper-cobalt-PGM-gold concentrate through conventional sulfide flotation for shipping via existing deep sea ports south of the project in Alaska.

The mine is anticipated to average 208,880 ounces of platinum-palladium-gold (3E), 73 million pounds of nickel and 55 million pounds of copper annually over the first 16 years of mining.

The PEA estimates an after-tax net present value (7.5 percent discount) of C$1.2 billion and internal rate of return of 24.6 percent.

Capital expenditures to build the initial phase of the mine are roughly C$586 million, including contingencies in the amount of C$100 million.

Mine expansion, sustaining and closure capital is estimated to be C$964 million over the life of the mine.

Yukon Zinc has shut down its Wolverine Mine in southeastern Yukon Territory for at least two to three months.

Citing a letter Yukon Zinc CEO Jingyou Lu wrote to suppliers, Yukon News reported that the suspension of operations is due to low metals prices.

Following news of the temporary closure, the Whitehorse, YT-based newspaper also reported that Yukon Zinc is nearly C$3 million behind in security payments to Government of Yukon , funds meant to ensure taxpayers are not left to pay for any clean-up and closure costs when the mine permanently shuts down.

This has put the company out of compliance with its mining license, which could create legal issues.

Adding further to questions about the future of the underground mine, in September contractor Procon Mining filed a lien against Yukon Zinc for C$17.9 million.

Countering this claim, Yukon Zinc accused Procon of defamation, saying it only owes the contractor C$56,698.

The mine's owner also asserted that Procon did not have the right to register the mine's inventory and concentrates as security.

Running at full capacity, Wolverine mills 1,700 metric tons per day and produces lead, zinc and copper concentrates with gold and silver by-products.

 

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