Vancouver, BC (August 3, 2017) Skeena Resources Limited (TSX.V: SKE) (“Skeena” or the “Company”) is pleased to announce that the Supreme Court of British Columbia has ruled in favour of its subsidiary, Sona Resources (“Sona”) regarding a dispute about the Company’s option to earn a 100% equity interest in the mineral and Crown-granted claims referred to as the Elizabeth property. This disagreement was already on going when Skeena acquired Sona in September of 2016 (see news release dated September 15, 2016).
In a written decision issued on July 28, 2017, the Supreme Court of British Columbia concluded that the option agreements covering the Elizabeth property remain in force and effect, and that the purported terminations of the option agreements by the plaintiff (current owners of the Elizabeth property) were invalid. Ultimately, the Court dismissed the plaintiffs’ claims and awarded Sona costs.
Sona’s assets consist of the royalty-free, 100% owned, past-producing underground Blackdome gold mine, located in the Clinton Mining District of southwestern British Columbia, and an option to earn a 100% interest on the adjacent Elizabeth property (subject to a 4% NSR royalty) in the Lillooet Mining Division.
Subsequent to closing of the appeal period (28 days from the ruling) Skeena will undertake a detailed project review. However, the Company’s primary efforts remain focused in the Golden Triangle of northwest British Columbia, and in particular on exploration at the Company’s wholly-owned Snip project. Consideration will be given to either joint venture participation or option opportunities to advance Blackdome & Elizabeth.
History of Blackdome & Elizabeth
From 1986 to 1989, Blackdome produced 225,000 ounces of gold and 547,000 ounces of silver from a low-sulphidation, epithermal system at a head grade of 20 g/t gold at a 10 g/t gold cut-off with recoveries of 93% gold. The Blackdome property includes a permitted 300 tonne-per-day conventional gravity separation and flotation mill and tailings facility, a large land package (>200 km2 at Blackdome and >115 km2 at Elizabeth), and a series of known mineralized veins with excellent exploration potential. The underground operation is also open for further resource definition and expansion. Both Blackdome and Elizabeth are located in a similar geologic setting with the latter having identified mineralization analogous to that of British Columbia’s Bralorne gold camp, which produced over 4 million ounces of gold from 1932 to 1971.
A Preliminary Economic Assessment (“PEA”) of the combined Blackdome and Elizabeth properties was completed on behalf of Sona in 2010 by Micon International*. The indicated and inferred post-closure resources at Blackdome (at a cut-off grade of 5 g/t gold, $1,000 US per oz. gold and 100% metallurgical recovery) are as follows:
Blackdome Mineral Resource Statement*
|Resource Category||Quantity||Grade||Contained Metal|
|Indicated||144,500 tonnes||11.29 g/t Au, 50.01 g/t Ag||52,600 oz. Au, 232,300 oz. Ag|
|Inferred||90,600 tonnes||8.79 g/t Au, 18.61 g/t Ag||29,500 oz. Au 54,400 oz. Ag|
The above estimation was restricted primarily to the No. 1 and 2 veins for the reason of proximity to accessible underground drifting. However, historical resources and drill targets with intercepts greater than 5 g/t gold have been delineated over 8 zones on 6 of the veins, which have yet to be re-evaluated.
The Elizabeth property is located 30 km due south of the Blackdome mill. Exploitation of Elizabeth would necessitate the construction of approximately 3.5 km of new road to connect two forest service roads, for a haul distance of 70 km. Mineralization occurs in a series of at least 6 subparallel, low-sulphidation, mesothermal quartz-carbonate veins. The current post-closure resource at Elizabeth (at a cut-off grade of 5 g/t gold, $1,000 US per oz. gold and 100% metallurgical recovery) was restricted to two of the 6 veins (Southwest and West) due to steep topography and limited drill information. None of the 6 veins has yet been drilled below a vertical depth of 200 metres.
Elizabeth Mineral Resource Statement*
|Resource Category||Quantity||Grade||Contained Metal|
|Inferred||522,843 tonnes||12.26 g/t Au||206,139 oz. Au|
Conclusions from the 2010 Micon International PEA are briefly summarized below:
- Good exploration potential to expand readily accessible resources on both properties
- Existing, permitted (Mining License M-171 and Effluent Discharge Permit PE7378) 300 tpd gravity/flotation mill, tailings facility and camp
- Excellent location (road accessible) 250 km northeast of Vancouver
- 9-year mine life producing 24,000 oz of gold per year at 200 tpd (expandable to 300 tpd with available mill)
- Mill feed commencing at Blackdome for 1 year, thereafter, trucking ore from Elizabeth
- Small existing footprint at Blackdome; no mill or tailings storage on the Elizabeth property; no acid rock drainage issues
- Combined metallurgical recovery of 93% Au and 78% Ag (Blackdome gravity recovery – 55.7%; Elizabeth gravity recovery – 61.9%)
- Metal price assumptions: $950 US/oz. Au, $15 US/oz. Ag, and at $1.08 CDN to the US dollar exchange rate, pre-tax NPV of $11,459,000 at 10% discount rate generating an Internal Rate of Return of 31%
- CAPEX $39 million (including 15% contingency)
The technical information contained in this news release has been reviewed and approved by Skeena’s Vice President of Exploration, Rupert Allan, P.Geol., a Qualified Person as described by National Instrument 43-101.
*See June 16, 2010 technical report filed on SEDAR under Sona Resources Corp. A PEA is preliminary in nature and includes mineral resources that are considered too speculative geologically to have the economic considerations applied to them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized.
Skeena Resources Limited is a junior Canadian mining exploration company focused on developing prospective base and precious metal properties in the Golden Triangle region of northwest British Columbia, Canada. The Company’s primary activities are the exploration and development of the past-producing Snip gold mine, acquired from Barrick Gold, and the past-producing Porter Idaho silver mine. The Company also recently announced Preliminary Economic Assessment results for the Spectrum-GJ copper-gold porphyry project.
On behalf of the Board of Directors of Skeena Resources Limited,
Walter Coles Jr.
President & CEO
Cautionary note regarding forward-looking statements
Certain statements made and information contained herein may constitute “forward-looking information” and “forward-looking statements” within the meaning of applicable Canadian and United States securities legislation, including, among other things, information with respect to the expected size and terms of the Offering, the expected timing for closing of the Offering and the expected use of proceeds of the Offering. These statements and information are based on facts currently available to the Company and there is no assurance that actual results will meet management’s expectations. Forward-looking statements and information may be identified by such terms as “anticipates”, “believes”, “targets”, “estimates”, “plans”, “expects”, “may”, “will”, “could” or “would”. Forward-looking statements and information contained herein are based on certain factors and assumptions regarding, among other things, the estimation of mineral resources and reserves, the realization of resource and reserve estimates, metal prices, taxation, the estimation, timing and amount of future exploration and development, capital and operating costs, the availability of financing, the receipt of regulatory approvals, environmental risks, title disputes and other matters. While the Company considers its assumptions to be reasonable as of the date hereof, forward-looking statements and information are not guarantees of future performance and readers should not place undue importance on such statements as actual events and results may differ materially from those described herein. The Company does not undertake to update any forward-looking statements or information except as may be required by applicable securities laws.
Neither TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.
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