Prelim assessment looks positive for Tyhee’s Yellowknife gold project

Tyhee Development Corp‘s (TDC-V) gold project in Yellowknife should post a pre-tax internal rate of return of 21.3% and a pre-tax net present value of US$145 million, the company says. The numbers were calculated based on a gold price of US$750 per oz. and a discount rate of 5%.

On an undiscounted basis the NPV would be closer to US$236 million and if the base case gold price was raised to US$900 per oz. gold, the NPV would jump to US$416 million, the company’s president and chief executive, Dave Webb, said in an interview.

The proposed combined open pit and underground operation — at 3,000 tonnes per day — will recover an average of 165,000 oz. gold a year for the first seven years for a total of 1.15 million oz. gold.

Average operating costs should come in at about US$384 per oz. gold and initial capital costs, including a 30% contingency, are estimated to come in at about US$150 million, according to a preliminary assessment. Another $26 million will be needed throughout the life of the mine as sustaining capital, the report found.

The preliminary assessment was calculated on the basis of a combined open pit and underground operation at both the Ormsby and Nicholas Lake deposits with a central processing facility at Ormsby. It did not take into account the 80,000 oz. of inferred gold resource at Tyhee’s Bruce Lake property, 50 metres north of the Ormsby zone.

Tyhee’s 100%-owned Yellowknife gold project has a National Instrument 43-101 measured and indicated resource of 11.2 million tonnes grading 3.52 grams gold per tonne for a total of 1.27 million oz. of contained gold. It also has an inferred resource of 3.6 million tonnes grading 3.21 grams gold per tonne, containing 374,000 oz. gold.

About 2 million tonnes or ore grading 3.08 grams gold per tonne would be extracted from the Ormsby pit at an overall strip ratio of 5.9. The Nicholas Lake open pit would yield 470,000 tonnes grading 4.11 grams gold per tonne with an overall strip ratio of 6.26.

Underground operations, using a 2.5 grams gold per tonne cutoff, would extract 3.8 million tonnes grading 5.5 grams gold per tonne from the Ormsby zone and 1.4 million tonnes grading 6.16 grams gold per tonne from Nicholas Lake.

Tyhee’s gold project in Yellowknife is made up of 6,625 hectares of mining leases about 90 km north of Yellowknife.

All resources are open at depth.

According to the company’s website, the Ormsby deposit has been developed with 959 metres of decline, two subdrifts along mineralized zones including 6,800 tonnes of stockpiled ore on surface. A total of 81,372 metres of core has been drilled, both surface and underground.

Development of the Nicholas Lake deposit consists of a decline and subdrifts in the A-2 Vein and A-6 Zone at about 90 metres below surface. Mineralized rock from the subdrifts are stockpiled on surface. A total of 15,374 metres of drill core in 71 drill holes has been drilled from surface.

At mid-day, Tyhee was trading down a penny at 40.5 a share on a trading volume of 102,700.

The Vancouver-based junior has traded between 32 and 82 over the last year.

Webb noted that at 40.5 a share with roughly 170 million shares outstanding, Tyhee’s market cap is about $70 million, approximately half the US$145 million discounted NPV estimate for its Yellowknife project alone.

“It all looks quite positive except for the markets,” Webb said. “In this market nothing will move the stock. The financial markets are collapsing, banks in Canada and the U.S. are at decade lows. The market sucks and whatever we say isn’t going to change anythingAll we can do is find more gold.”

And Webb is confident that Tyhee will do just that. “We’ve been publishing some really hot numbers from Clan Lake,” he said of the deposit, 33 km southwest of the Ormsby zone.

Results from Clan Lake include 78.8 metres of 1.94 grams gold per tonne, including 33 metres of 4.39 grams gold per tonne in one drill hole and 21.5 metres of 10.39 grams gold per tonne in another at shallow depths “indicates substantial potential.”

At Goodwin Lake, 13 km southwest of the Ormsby zone, Webb notes that results have included 24.8 metres of 0.755 grams gold per tonne in one drill hole and 6.6 metres of 6.42 grams gold per tonne in another, which indicate the existence of both large low-grade domains as well as moderate width high-grade zones.

Tyhee was incorporated in 1993 and listed on the TSX Venture Exchange in 1994.