The vast-majority of global platinum production comes from tough jurisdictions like South Africa and Russia.

Wellgreen Platinum (WG:TSX) has one of the world's largest undeveloped PGM deposits located in the mining friendly Yukon. An updated PEA was released today (here's the news release) showing after-tax NPV of CAD$1.2 billion with an after-tax IRR of 24.6% at a 7.5% discount rate.

Wellgreen PEA Highlights:

  • Average Annual Production of 208,880 Ounces Platinum, Palladium and Gold (3E), plus
  • 73 Million Pounds of Nickel and 55 Million Pounds of Copper over the First 16 Years of Mining
  • Low All-in Sustaining Cost3 of US$457 per Ounce of 3E on a Co-Product Basis with Base Metals
  • Estimated Base Case Pre-Tax NPV7.5% of CAD$2.1 Billion and IRR of 32.2%
  • and After-Tax NPV7.5% of CAD$1.2 Billion and IRR of 24.6%

The new PEA shows robust economics that would place Wellgreen as one of the lowest cost global producers of PGM metals.

Investors should take note of the metal prices used in the base case scenario which are much higher than current metal prices for most metals. Base Case metal price assumptions: US$1,450/oz Pt, US$800/oz Pd, US$1,250/oz Au, US$8.00/lb Ni, US$3.00/lb Cu, US$14.00/lb Co and US$0.90 = C$1.00.

We had an opportunity to talk to Wellgreen CEO Greg Johnson, a former co-founder of Novagold Resources and South American Silver, about the tough climate for the mining industry the last couple years and why Wellgreen could be an important PGM mine one day.

The following is a transcript of the above video.

Greg Johnson, CEO, Wellgreen Platinum, Cambridge House transcript:

Well 2014 was one of the more challenging years in the mining sector. In the three to four years of correction the company was able to successfully raise about $20 million dollars. We were one of the few companies to be able raise significant funding.

We had major advancements on our project in terms of doubling the size of the resource. Major advancement on our metallurgy. We are culminating now in 2015 with an updated study which will be a significant understanding change in the project....  focusing on a smaller capital project very doable in terms of where we are going.

Challenges for 2015 are really after that study is out  is going to be hitting the ground running on a pre feasibility program. We are going to be looking at bringing in some new additional investors.

We feel the market may have turned we are cautiously optimistic. We think it is going to be an exciting year ahead in 2015.

In addition to the challenges in the capital markets. As I mentioned Wellgreen was one of the few companies to raise significant capital last year. We are seeing that with the significant expansion of our overall resource. We now have 5.5 million ounces of measured and indicated platinum and another 13.8 million ounces of inferred platinum in an open pit. This really has our project stand apart from others in the space.

Platinum and Palladium are much more rarer (scarcer) than the gold space. Most of the worlds platinum and palladium is out of South Africa or Russia. So being in a location like the Yukon, next to an existing highway with port facilities in place really makes the Wellgreen project stand out globally on the platinum,palladium,nickel, and copper front.

Read: Wellgreen Platinum Announces Positive Preliminary Economic Assessment Update on its Wellgreen PGM-Nickel Project

Note: Wellgreen Platinum will be hosting a Live Webcast at 1:00 p.m. Eastern Time (10:00 a.m. Pacific Time) on Tuesday February 3 to discuss the results of the 2015 PEA. Click here to participate or call Toll Free (North America) 1-888-390-0546.

This is not a solicitation to purchase or sell securities. Always do your own due diligence. Additionally, this video and article may contain forward looking statements.