Columbia Yukon has a major molybdenum resource at Storie Deposit
Columbia Yukon acquired the Storie Deposit project through a 2006 option agreement. A series of aggressive drill programmes led to the calculation of an NI 43-101-compliant inferred resource last year. This recently was substantially upgraded to an indicated 98.3 million tonnes, averaging 0.064 percent molybdenum, with an inferred 30.9 million tonnes averaging 0.059 percent molybdenum.
The exploration potential at Storie Deposit remains excellent
The resource remains open along strike to the east, north and west, and at
depth. Columbia Yukon completed another drill programme subsequent to
the resource calculation, which resulted in extensions to the mineralisation,
and with potentially higher grades. In particular, evidence of a significant
higher‑grade zone could appreciably enhance the project economics.
Columbia Yukon is undertaking another major drill programme in 2008
Based on the encouraging assays obtained in 2007, Columbia Yukon designed
its 2008 drill programme to expand the existing resource further. In particular,
the drilling, which commenced in late May, is focusing on further delineation
and expansion of the new higher-grade zone noted last year. The company is
budgeting over C$6m for its 2008 exploration programme.
A second British Columbia project offers added potential
The company has a gold prospect in southeastern British Columbia. The
Barnes Creek property has a lower priority in light of recent developments
at Storie and Columbia Yukon is optioning the project to White Tiger Mining
Corp. White Tiger can earn a 60-percent interest in exchange for a C$0.5m
exploration expenditure over a two-year period. Columbia Yukon also holds
interests in several prospects in Labrador.
Exploration risk remains high
Columbia Yukon’s Storie Deposit project has a substantial indicated
resource with opportunities for significant expansion. The potential economics
are favourable, but the project remains at the exploration stage, prior to
prefeasibility. As a result, there is a risk that development at Storie Deposit
will not occur in time to capitalise on the currently robust molybdenum
price. Further, there is the risk that continued exploration might not delineate
sufficient economic mineralisation to support our base hypotheses.
Our core base-case valuation of C$0.92 is appreciably higher than the current share price
We assess Columbia Yukon’s current value at C$0.92 per share, with
significant potential for appreciation with exploration success. Continued
development suggests valuations as high as C$4.78 per share in the
post‑permitting environment.
