White Gold Project’s PEA highlights 41% IRR with 1.5-year payback  – Richard Mills

White Gold’s (TSXV:WGO, OTCQX:WHGOF, FRA:29W) namesake project in Canada’s Yukon Territory has reached the next stage of development, with the release and filing of the Preliminary Economic Assessment (PEA).

Toronto-based White Gold said the maiden PEA outlines a 9.4-year, 12,000 tonne-per-day open-pit operation producing an average of 188,000 ounces of gold per year at a USD$3,600/oz gold price.

The White Gold Project has an after-tax 41% Internal Rate of Return (IRR) with a payback of 1.5 years, which are outstanding economics.

Within a PEA, Internal Rate of Return and payback period are core financial metrics used to measure how fast and efficiently a mine will make money. IRR is the annualized percentage yield (growth rate) that a project is expected to generate over its life.

Target benchmarks for mining:

• Elite/High Return: Above 30% to 40% (often needed in higher-risk political jurisdictions to absorb volatility).

• Standard/Acceptable: 20% or higher in safe, stable jurisdictions like Canada or the US.

• Marginal: Below 15%, which raises red flags for financing given the high risk of commodity price swings.

Payback time is the number of years required for a mine’s cumulative operating cash flows to recover the initial upfront capital expenditure (capex).

It tracks when the running total of net cash generation turns from negative (during construction) to positive (recovering the build cost).

Target benchmarks for mining:

• Elite: Under 2 years.

• Average/Healthy: Under 4 years.

• High Risk: Over 5 years (dangerous because commodity prices can crash before capital is recovered).

The White Gold’s Project’s 41% IRR and 1.5-year payback period easily falls within the “Elite” categories for both, making it a high-return, low-risk investment for financiers.

The PEA includes the Golden Saddle, Arc, Ryan’s Surprise and VG deposits, known collectively as the White Gold Project. It outlines a technically straightforward open-pit mining operation with the potential for positive economics at a consensus long-term gold price and establishes the development framework for a district that remains largely untested beyond the deposits included in the study.

In addition to the positive PEA economics, White Gold has identified several opportunities to extend mine life, increase annual production, and further increase project economics in subsequent studies. These include potential resource conversion and growth at the existing deposits with prior, ongoing and future drilling; the underground mining potential at Golden Saddle; and a prospective exploration pipeline in the immediate vicinity of the White Gold Project consisting of over two dozen targets.

The PEA highlights life-of-mine after-tax free cash flow of CAD$2.672 billion averaging approximately $280 million per year. At USD$4,500 gold, the IRR rises to 57% and the payback period drops to 1.2 years.

White Gold notes the PEA is the first phase of a district-scale opportunity, with the mine plan only drawing on about 60% of the current mineral resource estimate (August 2025) of 1.732 million ounces Indicated and 1.265Moz Inferred.

Drill results from 2025 and ongoing 2026 drilling are excluded in the resource, and all four deposits are still open for expansion. The project covers approximately 55,000 hectares with 25 additional targets identified across the property, the majority of which have seen limited or no drilling.

“Our Maiden PEA is a significant milestone for White Gold, delivering a project with strong economics and significant growth potential. Few gold projects anywhere offer this combination of scale, potential returns, favourable jurisdiction and upside,” White Gold’s CEO David D’Onofrio said in the Sept. 25 news release.

“I would like to thank and congratulate our team and all stakeholders who have supported us over the years in advancing The White Gold Project from a conceptual exploration idea towards a development asset with a PEA that compares very well to its peers in the sector. Even more exciting is the growth potential of the White Gold Project based on previous and ongoing drilling not included in the PEA, future drilling and the substantial potential of our underexplored truly district scale land package within the White Gold District, which has seen significant recent investment by prominent mine builders further advancing it towards becoming a leading Canadian mining camp. We are very fortunate to have the right projects, in the right place, at the right time, with a great team and supporters to continue to responsibly build value for all stakeholders.”

President Donovan Pollitt states:

“This is a strong technical foundation, built on deliberately conservative assumptions. The PEA open pit mine plan draws on less than two thirds of our current resource ounces and applies preliminary recovery assumptions. A 9.4 year operation producing an average of 188,000 ounces annually is a compelling initial configuration for a district where mineralization remains open and most of our targets remain undrilled. Underground mining was not included in this maiden PEA but remains a separate opportunity that will be examined as deeper drilling advances the higher-grade resource at Golden Saddle.

“The PEA results demonstrate a potentially economic project on a resource estimate dated August 19, 2025, which includes drilling information up to November 1st, 2025. Additional gold ounces would add to the already very positive potential economics of the project. The work ahead of us, including expansion drilling on known zones, greenfield target drilling, metallurgical optimization, updated resource estimation and the next stage of economic study, is precisely the kind of work that increases value per share over time.”

Conclusion

The White Gold Project’s PEA is certainly impressive. At a 41% internal rate of return (IRR) — the annualized growth rate that a project is expected to generate over its life — the project recovers its initial upfront capex and begins net cash generation within a very short 1.5 years.

The figures put White Gold in an “Elite” category of mine development projects characterized by high returns and short payback periods. These projects are the ones sought out by financiers, which lend money to mining companies for them to build mines and start production.

The PEA is thus a crucial milestone in the life of a junior because it often determines whether a project moves forward or becomes dead in the water due to lack of financing for the next steps.

The potential high-grade, open-pit mine is forecasted to produce 188,000 ounces of gold per year at USD$3,600/oz. After-tax free cash flow is about $280 million a year.

White Gold Corp.
TSXV:WGO, OTCQX:WHGOF, FRA:29W
2026.09.25 Share Price: Cdn$2.07
Shares Outstanding: 226m
Market Cap: Cdn$466.8m
WGO website  

Richard (Rick) Mills
aheadoftheherd.com

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Richard does not own shares of White Gold TSXV:WGO. WGO is a paid advertiser on his site aheadoftheherd.com

This article is issued on behalf of WGO