Prophecy Platinum Corp. (CVE:NKL) (OTCQX:PNIKF) saw its shares rise over six percent Monday after it announced the initial results of its 2012 underground drill program on the Wellgreen Platinum group metals (PGM)-Nickel (Ni)-copper (Cu) project in the Yukon.
Shares were up 12 cents to $2.10 after the company said it
intersected “wide and continuous” mineralization in all seven drill hole
results received from its 100 percent-owned Wellgreen project.
Results included highlights of higher grade intercepts of 21.3 metres of 0.90 grams per tonne (g/t) Platinum (Pt) + palladium (Pd) + gold (Au), 0.39% Nickel (Ni), and 0.25% copper (Cu) (0.65% Ni equivalent) in hole WU12-524.
Hole WU12-527 intersected 21.6 metres of 0.98 g/t Pt+Pd+Au, 0.35%
Ni, and 0.30% Cu (0.63% Ni equivalent), and hole WU12-531 returned 15.2
metres of 1.12 g/t Pt+Pd+Au, 0.23% Ni, 0.68% Cu (0.67% Ni equivalent).
"2012 has been a very productive year thus far with 15 holes already completed," said Prophecy chairman John Lee.
"Wellgreen is gaining recognition as a premier Canadian Ni-Cu-PGE
project for its location, size, and grades. We expect a very busy June
with analyst site visits, continued infill and priority-target
exploration drilling, and the delivery of first-ever Wellgreen
preliminary economic assessment (PEA)."
Prophecy noted that Ni equivalent calculations are based on a long range pricing index of US$9.52 per pound Nickel, US$2.96 per pound copper, US$15.78 per pound cobalt, US$1,085 per troy ounce gold, US$1,776 per troy ounce Platinum, and US$689 per troy ounce palladium.
The company said that all of the reported holes were mineralized at
their end-of-hole lengths, suggesting mineralization continues beyond
and were interrupted due to poor ground conditions.
Holes WU12-520, WU12-524, WU12-525, WU12-526 and WU12-527 were
drilled in the central east zone of the property, approximately 140
metres from the adit portal entry.
Holes WU12-531 and WU12-532 were drilled roughly 270 metres west and
along the geological strike near the centre of the central east zone of
the Wellgreen resource.
Prophecy said that the holes were drilled on and off-section in order
to provide a better understanding of the behaviour of the
"The results highlight the consistency of the Wellgreen
mineralization along strike, as well as off-section," said the company
in a recent release.
The entire 2012 drilling program is expected to total around 20,000
metres and will be the biggest exploration campaign in the Wellgreen
project's history, Prophecy said.
Drilling was initiated in February, and represents the first phase of
the drill program, designed to upgrade a significant portion of
Wellgreen's NI 43-101 inferred resource into the measured and indicated
The company said that the most recent drill results “appear to be
very consistent” with the resource model, and results from an additional
eight holes are expected next month.
Prophecy also said it has located priority drill targets to the east,
based on historic aeromagnetic data that indicates that the
host-intrusion to the Wellgreen resource extends eastwards for up to
In other news, natural resources investment bank Casimir Capital has started coverage on Prophecy Platinum, expecting "strong economics" in the Wellgreen PEA, expected next month.
Casimir has initiated coverage on Prophecy with a "Speculative Buy" rating and $7 target price.
"We expect the study to demonstrate strong economics based on the
current resource and through production of single bulk concentrate,"
Casimir analyst Steven Willis said.
"Directly to the east, a
2.3 km magnetic anomaly suggests potential for resource expansion. If
the deposit holds together, the additional strike length implies the
resource could increase by nearly 90%."
Casimir is assuming Wellgreen will go into production in 2017 at an annual rate of 98.6 million pounds of Nickel equivalent at cash costs of $0.98 per pound of Nickel.
The investment bank assumes a 250 million tonne resource will be mined
over 20 years for a total capex of $1.6 billion, with a 10% Net Present
Value of $1.3 billion and IRR of 28% and 3.6-year payback period.
In March, Mackie Research initiated coverage on Prophecy Platinum at "Speculative Buy" with a $7.50 target.
"We like Prophecy Platinum for its decisive management team, growing technical capability and valuation upside potential. The
Wellgreen project stands out for its size, metal mix, open-pit
potential, good jurisdiction and blue-sky potential," Mackie analyst
Matt O'Keefe said.
Mackie Research expects the PEA for
"world-class" Wellgreen to be followed by a capital raise of $20 to $30
million to fund ongoing infill and exploration drilling.
Prophecy Platinum is a mineral exploration company focused on developing Platinum group metals (PGM) and Nickel sulphide projects.
The 120 claim, 2,500-hectare flagship Wellgreen property is located
approximately 35 kilometres northwest of the airstrip at Burwash
Landing, and just 15 km from the Alaska Highway and 402 km from Alaska's
Haines deep sea port.
A July 2011 technical report gave the project 289 million tonnes of inferred resource grading 0.38% Nickel, 0.35% copper, 1.18 g/t PGM plus gold, and 14 million tonnes of indicated resource at 0.69% Nickel, 0.62% copper, 2.25 g/t PGM plus gold.
group metals have a variety of uses including catalysts in automobiles
and fuel cells, jewellery as well as glass and others industrial uses.
In June 2011, Prophecy Platinum was spun off from Prophecy Coal (CVE:PCY). Prophecy Coal currently owns 22.5 million shares, or about 42 percent, of Prophecy Platinum.