Snowline Gold outlines strong economics in first PEA for Valley in Yukon

[Redator]

Snowline Gold (TSXV: SGD) says a preliminary economic assessment (PEA) for its Valley deposit at the Rogue project in Yukon shows robust economics for what could become a world-class mining operation.

The study presents a 20-year mine life producing 6.8 million oz. of gold through conventional open-pit mining and milling. Average production over the first five years is projected at 544,000 oz. annually, with an all-in sustaining cost (AISC) of $569 per oz. in that period. Life-of-mine AISC is estimated at $844 per ounce.

Based on a gold price of $2,150 per oz., the project carries a post-tax net present value (NPV) of C$3.37 billion at a 5% discount rate, with an internal rate of return (IRR) of 25%. At a higher price of $3,150 per oz., the post-tax NPV rises to C$6.8 billion and the IRR increases to 37%. The initial capital cost is pegged at C$1.7 billion, with a projected payback period of 2.7 years from the start of production.

“We view the PEA as very robust, with substantial annual production, moderate capital, attractive costs, and importantly NPV well in excess of initial capital,” Canaccord Genuity mining analyst Peter Bell said in a note on Tuesday. “The PEA provides a solid foundation that the company can build upon. When considering a gold price closer to spot (~$3,400 per oz.), the NPV jumps considerably to C$7.66 billion.”

Shares rise

Shares in Snowline Gold have gained 11% this week to C$8.58 apiece in Toronto by Wednesday morning, valuing the company at C$1.37 billion. They’ve traded in a 52-week range of C$3.88 to C$8.95.

“This PEA reinforces our conviction that Valley can become a world class mining operation developed at a high standard, with clear potential to bring significant economic benefits to the Yukon,” Snowline CEO Scott Berdahl said in a release late Monday.

“The rare combination of high margins and large scale makes for a robust asset with stability through a wide range of market conditions. The low strip ratio and strong gold grades enhance project economics by increasing mining efficiency while reducing the overall project footprint.”

The PEA is based on a pit-constrained indicated resource of 164.2 million tonnes grading 1.48 grams gold per tonne for 7.8 million oz. contained gold, and an inferred resource of 66.4 million tonnes grading 1.12 grams for 2.4 million oz. contained gold. The mineralization starts at surface and remains open in multiple directions.

The results position Valley among the largest undeveloped gold deposits in Canada, with strong margins and favourable operating metrics. The company has initiated fieldwork and engineering studies to support further technical advancement, while continuing to explore across its district-scale land position in the Tombstone Gold Belt.

Remote location

Snowline faces several significant hurdles as it advances the Valley project and broader Rogue district toward development. Its remote Yukon location subjects the company to logistical complexities and high infrastructure costs despite some regional support. Yukon’s new Resource Roads Regulation may help, but building access still demands heavy investment.

Additionally, while its relationships with Indigenous partners are strong, formal agreements remain pending, and regulatory timelines in northern Canada can still delay progress. The Valley deposit lies within the traditional territories of the Na-Cho Nyäk Dun, Ross River Dena, and Kaska Nation. Snowline said it remains committed to working with Indigenous governments and communities as the project progresses toward feasibility and permitting.

‘Hollywood problem’

Fierce expectations following its high-grade drilling results—what an analyst dubbed a “Hollywood problem”—mean any missteps in funding, permitting or execution could erode investor confidence. Scale and potential are clear, but turning vision into operation will require Snowline to deftly manage funding, infrastructure planning, regulatory risk and community relations concurrently.

In under four years, Snowline has progressed from initial soil sampling and early drilling at Valley to establishing a strong preliminary valuation for the project. The company says this marks a key step as it advances the deposit through technical, environmental and permitting stages.

“It’s the kind of deposit that you could build a major around,” Snowline CEO Scott Berdahl told The Northern Miner in early May. “We’re very fortunate to have found something like it and so pushing [the project] ahead is exactly what we’re doing.”