Westhaven Gold (WHN) - Franco Nevada Royalty Invests in Vision

Westhaven Gold Corp. is focused solely on the southwestern region of British Columbia on the Spences Bridge Gold Belt. The company owns a 100%-interest in 4 properties within its 35,000 hectares land package, namely its Prospect Valley, Shovelnose, Skoonka Creek and Skoonka North gold properties. Westhaven Gold Corp. announced on the 14th of September 2022 that it had entered into a financing agreement with Franco-Nevada Corp., a leading gold-focused royalty and streaming company.

The financing agreement includes the sale of a 2% net smelter return (NSR) royalty to Franco-Nevada Corporation for a value of USD$ 6 million. The NSR will apply to all of the assets of Westhaven across the Spences Bridge Gold Belt. Westhaven Gold Corp. has the option to buy back 0.5% of the NSR for USD$ 3 million, for 5 years from the closing of the transaction.

Westhaven Gold Corp. on the 8th of September 2022 released drill results from its ongoing exploration drilling campaign at its Shovelnose Gold property. The highlights of the release include intersecting 1.84 g/t of gold and 4.79 g/t of silver over an interval of 21.9 m starting at a 44 m downhole depth at the project's FMN zone. The drilling campaign has also been able to discover a new gold-bearing zone according to the company, which showed mineralisation of 3.28 g/t of gold over 0.9 m and 1.39 g/t of gold over 1.2 m.

Westhaven Gold Corp. plans to continue its exploration and expansion in the future with the aim being to delineate its gold resources at its Shovelnose project to 2 million ounces. The company does not plan to add an additional drilling rig to its exploration and expansion initiatives but will evaluate the market in the future from where it will determine the necessity for another rig. The company further plans to publish and update the mineral resource estimate of the Shovelnose gold property in 2023. The updated mineral resource estimate will consist of newly discovered zones and will include the underground component of the project’s South Zone.

Projects

The Spences Bridge Gold Belt is a 110 km northwest-trending belt of intermediate to felsic volcanic rocks, which are highly prospective for epithermal style gold mineralisation. Epithermal style gold mineralisation is usually caused by hydrothermal fluids at shallow levels in the earth’s crust resulting in diverse forms of mineralisation including bulk tonnage, veins, fault-hosted veins, stockwork veins and breccia pipes.

Westhaven Gold Corp owns 100% of all four of its projects located on the Spences Bridge Gold Belt, with all of the projects located in close proximity to large producing mines. The Shovelnose property of the company is a 17,623-ha land package located approximately 30 km from the town of Merritt in British Columbia. The property is accessible through a provisional highway as well as logging roads. In January 2022, Westhaven Gold published a mineral resource estimate for the property. The mineral resource estimate is based on open-pit mining methodology and consisted of 56,491 m of drilling. The highlights of the mineral resource estimate include 791,000 ounces of gold and 3,894,000 ounces of silver in the Indicated category and 263,000 ounces of gold and 1,023,000 ounces of silver in the inferred category.

Franco-Nevada Corporation Investment

Westhaven Gold Corp. announced on the 14th of September 2022 that it had entered into a financing agreement with Franco-Nevada Corp., a leading gold-focused royalty and streaming company. The financing agreement includes the sale of a 2% net smelter return (NSR) royalty to Franco-Nevada Corporation for a value of USD$ 6 million. The NSR will apply to all of the assets of Westhaven across the Spences Bridge Gold Belt. Westhaven Gold Corp. has the option to buy back 0.5% of the NSR for USD$ 3 million, for 5 years from the closing of the transaction.

The agreement further includes the sale of the Talisker Royalty, the company held, to Franco-Nevada Corp. for USD$ 750,000. Franco-Nevada Corp. has also, as part of a private placement, agreed to subscribe for 2,5 million shares of the company at CAD$ 0.4 per share for the total gross proceeds of CAD$ 1 million towards Westhaven Gold Corp. Gareth Thomas, the President and CEO of Westhaven Gold Corp. explains the financing agreement as follows:

“…we've been working on this for quite some time here, but we arranged a nice financing deal with Franco-Nevada. It equates to just shy of USD$ 8 million - USD$ 7.75 million, which equates to just over CAD$ 10 million. We're selling a 2% NSR on our projects to Franco-Nevada, and we're also selling the 2.5% NSR we have on Talisker ground to them for USD$ 750,000. Once again, just over CAD$ 10 million, but it's also important to note that where we are, we're in BC, with the mineral exploration tax credit we get 30% back, so these being hard dollars, that really equates to about CAD$ 13 million in cash, and that gets us well into 2024. These markets have been pretty soft and tricky, so this is a very good non-dilutive way to finance. We think it was the best option here for moving forward.”

Westhaven Gold Corp., having a market Cap of USD$ 55 million, is a smaller company than Franco-Nevada Corp. usually deals with. Thomas explains that the financing agreement shows that Franco-Nevada has faith in the company and its projects and serves as a stamp of approval to the investor community.

“I should note that it's USD$ 6 million for the royalty but they are also doing a USD$ 1 million private placement as well with us. Again, that's another stamp of approval, they certainly see the positives of the Spences Bridge gold belt and Shovelnose. We have spent 4 to 5 months working on this and it was one of our goals for the last year to look at more creative, non-dilutive ways to finance.”

Allocation of funds and recent drill results

The funds raised by the financing agreement with Franco-Nevada Corp. will be implemented by Westhaven Gold Corp. to further its exploration and expansion drilling initiatives. The company is underway with an ongoing drill campaign at its Shovelnose gold property, where it is implementing two drill rigs. The company will move one of the drill rigs to its Skoonka Creek project, to conduct an inaugural drilling program at this project. Thomas explains the allocation of funds as follows:

“We're going to continue on the drill bit. Obviously, we've got two rigs on Shovelnose. One of those is actually heading up to our Skoonka project, up to the northwest, which we've never drilled before. We've had this project since 2017, but for various reasons, most notably our success at Shovelnose, we haven't put many resources there. We've been up to Skoonka but we haven't drilled it yet. The drills will be turning by the end of this month and we'll see what we have at Skoonka. Then, of course, we will continue to develop on Shovelnose, we have hundreds of targets there where we see a lot of potential, on and off this main 4 km strike”

Westhaven Gold Corp. on the 8th of September 2022 released drill results from its ongoing exploration drilling campaign at its Shovelnose Gold property. The highlights of the release include intersecting 1.84 g/t of gold and 4.79 g/t of silver over an interval of 21.9 m starting at a 44 m downhole depth at the project’s FMN zone. The company also intercepted 3.11 g/t of gold and 287 g/t of silver over 0.6 m as well as 2.31 g/t gold and 173.44 g/t silver over 1.13 m at the zone.

The drilling campaign has also been able to discover a new gold-bearing zone according to the company. The newly discovered zone is located 1.2 km northeast of the South zone and shows mineralisation of 3.28 g/t of gold over 0.9 m and 1.39 g/t of gold over 1.2 m. Westhaven Gold Corp. has in 2022 drilled approximately 31,000 m at the Shovelnose project.

Future initiatives

Westhaven Gold Corp. plans to continue its exploration and expansion initiatives in the future with the aim being to delineate its gold resources at its Shovelnose project to 2 million ounces. Thomas explains the company’s intent as follows: 

“The big thing is that we want to build our gold and silver inventory. That's no secret. We want to add ounces here. We see the 2 million ounce mark being a magic number where many groups start getting more interesting at that point. We believe this will be a mine of some sort, even where it is right now, but it's not going to get the interest of some of the big groups just yet. Location is key here, it's right off a major highway in Canada, half an hour from the city of Merit. That obviously bodes well for where we are, but we want to find more with the drill bit, hence, that's where a lot of this money will go to unearth finding more gold here.”

The company does not plan to add an additional drilling rig to its exploration and expansion initiatives but will evaluate the market in the future from where it will determine the necessity for another rig. Thomas states:

“Are we ramping things up? Of course, nobody knew that we were raising this money, but the big topic here is: do you ramp up? Do you slow down? Are you getting the attention of the market with things that aren't necessarily 23 m at 37 g/t? For us now, we're keeping with 2 rigs. That seems to be a good number for us. One of them is moving to Skoonka, then we'll have that one back in the winter to have 2 rigs again. We are sticking with the 2 rigs, but we certainly could be ramping up early next year if the market looks like it's going to show a bit of turn.”

The company further plans to update and publish the mineral resource estimate of the Shovelnose gold property in 2023. The updated mineral resource estimate will consist of newly discovered zones and will include the underground component of the project’s South Zone.

“It is likely that next year at some point we'll look to come up with a resource. We will also have an underground component as well at the south zone, which we think is probably going to be better than the open pit scenario, which is already really good, but depending on where the economics drive that, and we're not thinking economics yet, we're thinking let's find more gold, we'll get to that next number resource after that.”

To find out more, go to the Westhaven Gold website