JV Video: Westhaven Gold rides $85M funding tailwind

West Haven Gold & Dundy Earn-In Deal: A Detailed Overview

Key Concepts:

• Spencer’s Bridge Gold Belt: A prospective gold-bearing geological region in British Columbia, Canada.
• Shovel Nose Project: West Haven Gold’s primary asset within the Spencer’s Bridge Gold Belt, currently undergoing development.
• Preliminary Economic Assessment (PEA): An initial, high-level economic study of a mining project, assessing its potential viability.
• Earn-In Agreement: A financing structure where one company (Dundy) funds exploration and development in exchange for an equity stake in the project.
• Epiothermal Mineralization: A style of ore deposit formation involving hot, aqueous fluids circulating through fractures in the Earth’s crust, less common in Canada.
• ESG: Environmental, Social, and Governance – increasingly important considerations for mining companies.
• Feasibility Study: A detailed engineering and economic study required to secure project financing for mine construction.
• JV (Joint Venture): A collaborative agreement between two or more parties to pool resources for a specific project.

1. The Dundy Earn-In Deal: Structure and Implications

West Haven Gold has secured an earn-in agreement with Dundy, valued at up to $85 million Canadian dollars. This deal allows West Haven to continue developing the Shovel Nose gold project in British Columbia while minimizing the need for frequent equity financing. Crucially, West Haven retains a 40% interest in the project as development progresses, a structure considered advantageous for potential future transactions and shareholder value. The $85 million will be deployed strategically, with an estimated $65 million allocated to advancing the project through feasibility studies. A firm commitment of $30 million from Dundy is guaranteed, ensuring consistent funding for development and exploration. This eliminates the risk of funding gaps that often plague junior mining companies.

2. Project Background & Potential of the Spencer’s Bridge Gold Belt

West Haven Gold has been evaluating projects in the Spencer’s Bridge Gold Belt for approximately 10 years. A significant discovery was made in 2018-2019 at the South Zone deposit. A Preliminary Economic Assessment (PEA) completed in March 2024 demonstrated attractive economics for the currently defined deposit. However, the company recognizes substantial exploration upside across its four properties, spanning a 100-kilometer strike extent of the belt. The vision is to develop a “generational mining camp” with multiple deposits, not just focusing on the existing Shovel Nose deposit.

The Spencer’s Bridge Gold Belt is highlighted as being equally well-endowed with mineral potential as the more publicized Golden Triangle in northern British Columbia. The region benefits from excellent infrastructure, including the Coquihalla Highway and existing power lines, and is home to major mining operations like Highland Valley (HudBay) and Copper Mountain Mine.

3. Rebranding and New Leadership

A recent rebranding and the appointment of a new leadership team were driven by the need for expertise in advancing the project beyond the discovery phase. This was spearheaded by Ira Thomas, Chair of the Board, and Gareth Thomas, former CEO. The new team comprises individuals with prior successful working relationships, including Zarolt (CFO), Robin Hopkins (VP Exploration), Ryan Federley (Operations), Allison Ripen Armstrong (Indigenous Relations/ESG), and Kelly Gatton (Communications). This team’s collective experience is intended to facilitate efficient project development and stakeholder engagement.

4. The Significance of the 40% Retained Interest

The 40% equity retention by West Haven was a critical negotiation point. CEO Ken Armstrong drew a parallel to Aber Resources’ successful strategy with the Diavik diamond mine in the 1990s, where retaining a 40% interest allowed shareholders to benefit significantly from subsequent transactions, including the purchase of Harry Winston Diamonds. This retained interest preserves the potential for a “takeover premium” and provides flexibility for future corporate actions.

5. Funding Allocation and Exploration Strategy

The $30 million commitment from Dundy will be allocated strategically. Approximately $15 million per year is anticipated to be spent on project advancement, covering pre-feasibility and feasibility studies. Roughly half of the $20 million exploration budget will be dedicated to drilling to expand the resource base at Shovel Nose and explore other targets within the belt. This dual focus on development and exploration is facilitated by the Dundy partnership, allowing West Haven to pursue both avenues simultaneously without the financial constraints of operating independently.

6. Team Alignment and Collaborative Approach

A key factor in the success of the deal is the strong alignment between the West Haven and Dundy teams. Dundy’s technical due diligence revealed a shared vision for the project’s development. The collaborative approach, characterized by open communication and mutual respect, contrasts with typical due diligence processes where information flow is often one-sided. Dundy brings valuable project development experience, complementing West Haven’s exploration expertise.

7. Market Opportunity and Long-Term Vision

Ken Armstrong believes the biggest opportunity in the current gold market is to be actively involved in projects that can reach production before the end of the current cycle. The Dundy partnership positions West Haven to potentially achieve production at Shovel Nose within this timeframe. The project’s unique epiothermal mineralization style, while less common in Canada, presents a novel opportunity. The long-term vision is to establish a multi-generational mining camp within the Spencer’s Bridge Gold Belt, similar to established mining regions elsewhere in Canada.

8. ESG Considerations

The company has prioritized Environmental, Social, and Governance (ESG) factors, bringing on Allison Ripen Armstrong to lead Indigenous engagement and ensure responsible project development. This demonstrates a commitment to sustainable mining practices and building positive relationships with local communities.

Conclusion:

The Dundy earn-in agreement represents a significant milestone for West Haven Gold, providing the financial resources and expertise to advance the Shovel Nose project towards production. The 40% retained equity stake, coupled with the $30 million funding commitment, positions West Haven for long-term success and shareholder value creation. The strong team alignment and strategic focus on both development and exploration underscore the project’s potential to become a significant gold mining operation within the prospective Spencer’s Bridge Gold Belt.