Yesterday, Westhaven Gold (TSX-V:WHN, OTC:WTHVF) delivered the best news shareholders have received in nearly two years. The freshly coined "Franz Zone" at Westhaven's Shovelnose Project in the Spences Bridge Gold Belt (SBGB) is indeed a legitimate discovery - a gold/silver bearing vein zone on strike with Vein Zone 1 from the South Zone.
Before I delve into more detail and reveal my excitement, let me add one word of caution - while yesterday's news is indeed extremely positive, some of what I am going to discuss is conceptual in nature and needs to be proved up through drilling. Exploration is hard work and it can often take years, or decades, to put the pieces of an economic mineral deposit puzzle together.
With that being said, let's delve into what has me jumping out of bed this morning.
The above cross section illustrates how hole SN20-101 (the first into the Franz Zone) returned two impressive intervals with the first delivering roughly 8 meters of 15 g/t gold (120 gram-meters) and the second returning a much broader interval of 16.32 meters grading 2.37 g/t gold and 31.15 g/t silver. Both of these intervals were extremely near to surface with the 2nd one ending at 57.44 meters down hole.
Now for some conceptual aspects, which are supported by strong evidence but still need to be proven through drilling. There’s some indication that Vein Zone 1 and Vein Zone 2 exist together as a single vein zone at the Franz Zone. Then those zones diverge as you move along strike to the south-east toward the South Zone. Perhaps more importantly, MOST of the area between the Franz Zone and where Vein Zone 2 starts to the southeast along strike hasn’t seen a drill hole. It could be the case that the vein zones start at/around the Franz Zone (or maybe along strike from it to the northwest) and then diverge into multiple vein zones as we move along strike to the southeast.
The geologic environment at Franz is virtually identical to the South Zone. Moreover, the Franz Zone cuts through the favorable host rocks, rhyolite and dacite. As can be seen from the pics of rock samples from Franz, the classic quartz veined ryholite with ginguro banding that we know all too well from the South Zone, also exists at Franz.
Westhaven currently has a rig at the Franz Zone and another around the Tower/Mik/FMN Zone, they will converge together somewhere between Franz and the Tower/MIK/FMN Zones. This will give Westhaven a strong indication as to what lies between the Franz Zone and the Tower/MIK/FMN Zones that exist along strike to the southeast.
A map from the August 2020 exploration update helps to understand where these different zones are located in relation to one another:
Do Vein Zones 1 and 2 converge somewhere between these two areas? Are there more of these high grade gold zones, similar to the Franz or South Zone, in between? As these drills converge, they’ll help answer these questions.
Vein Zone 1 which spans nearly 4 kilometers in strike length already, is still open along strike to the northwest and southeast.
Ed Balon (the father of the Spences Bridge Gold Belt) has stated that the Franz holds the best looking outcrop he has seen across the entire SBGB in over 20 years of prospecting in the area!
Westhaven Exploration Manager Peter Fischl made a point to emphasize that
"The zone is currently being tested with one drill. Eight holes have been completed on four sections spaced 50m apart. The zone has been intersected in all holes, giving a drill-tested strike length of 150m. The Franz Zone appears to be part of a single northwest trending multi-kilometre scale gold bearing vein system that includes the more recently drilled South Zone and the historic Mik and Tower showings. This vein system will continue to be the focus of much of the exploration effort at the Shovelnose Gold Project.”
Westhaven currently has 5 holes from Franz in the lab pending assays and another rig testing targets off the known vein zones to the southwest of the South Zone.
The map at Shovelnose has been opened up by the discovery at Franz and the potential exists for a large multi-million ounce gold/silver deposit in an ideal location and safe jurisdiction.
Yesterday, I posted the following chart showing the well formed inverse head & shoulders pattern in the WHN chart:
Yesterday's final hour surge on heavy volume sent Westhaven shares as high as $1.25, eventually closing at $1.19. Given that today is a Friday, a weekly close above $1.25 would indicate an upside target of $1.80 could be achieved over the coming weeks.
C$1.80 per share would give Westhaven a fully diluted market cap of roughly C$200 million. Considering Shovelnose's ideal location, and the near surface high-grade potential at Franz and the South Zone, it's not hard to get to a C$100 per ounce valuation for Westhaven's ounces in the ground. We know there are roughly 1,000,000 ounces already identified at the South Zone, the market will now try to determine how many ounces exist to the northwest at Franz/Mik/FMN/Tower etc. And this gives zero value to the rest of Westhaven's highly prospective property portfolio across the SBGB.
Following's yesterday morning's NR I added more WHN.V shares at $.97, and I have added even more this morning at $1.11. Westhaven's valuation is well supported by a top notch management team with a lot of skin in the game (30% insider ownership), a considerable amount of gold/silver already outlined at the South Zone, a highly encouraging new discovery at the Franz Zone, and the strong potential for additional discoveries across a 17,000 hectare property package at Shovelnose.
Disclosure: Author owns Westhaven Gold shares at the time of publishing and may choose to buy or sell at any time without notice.
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