Eskay Creek

In December 2017, Skeena secured an option to acquire 100% interest in the Eskay Creek property from Barrick Gold Inc. Discovered in 1988, the former Eskay Creek Mine produced approximately 3.3 million ounces of gold and 160 million ounces of silver at average grades of 45 g/t gold and 2,224 g/t silver and was once the world’s highest-grade gold mine and fifth-largest silver mine by volume*.

Eskay Creek Camp 1989 with Prime Resources' Geologists

A precious and base metal-rich volcanogenic massive sulphide (VMS) deposit, the Eskay mineralization has been the focus of considerable exploration activity dating back to 1932. Exploration drilling in 1988 led to the discovery of the 21A and 21B zones, followed by underground development of the 21B zone starting in 1990 with the official opening of the Eskay Creek Mine in 1994. Over the 14-year life of the mine, approximately 2.2 million tonnes of ore was mined with cut-off grades ranging from 12-15 g/t gold equivalent for mill ore and 30 g/t gold equivalent for smelter ore

Eskay is endowed with excellent infrastructure including all-weather road access and proximity to the new 287-kilovolt Northwest Transmission Line. The Property consists of 8 mineral leases, 2 surface leases and several unpatented mining claims totaling 6,151 hectares.

Ron Netolitzky & Chet Idziszek, Eskay Creek 1989 Exploration Drilling

Maiden Resource Estimate for Eskay Creek.

Skeena released a Maiden Resource Estimate for Eskay Creek on September 17th 2018.The total Indicated resource includes 1,021,000 AuEq ounces. 207,000 of which is pit constrained and averages a 5.9 g/t AuEq and 814,000 underground which averages 10.1 g/t AuEq. The total Inferred resource is 850,000 AuEq ounces with 589,000 ounces pit constrained averaging 4.3 g/t AuEq and 261,000 ounces underground averaging 10.0 g/t AuEq

  • Pit constrained resources are quoted at a 1.0 g/t AuEQ cut-off.
  • Underground resources are quoted at a 5.5 g/t AuEQ cut-off.
  • AuEQ = Au (g/t) + {Ag (g/t) /75]
  • Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resources estimated will be converted into mineral reserves.
  • Resources are reported in-situ and undiluted for both pit constrained and underground scenarios and are considered to have reasonable prospects for economic extraction.
  • In accordance with NI 43-101 recommendations, the number of metric tonnes was rounded to the nearest thousand. Any discrepancies in the totals are due to rounding effects.

Proposed/ Completed Work

Barrick’s proprietary Eskay database has been held confidentially since the mine closed in 2008. The Skeena technical team has compiled and reviewed 20 years of exploration and production information containing 7,881 drill holes totaling 706,904 metres (surface & underground). The Company's has completed a geological model and NI 43101 resource estimate. Of utmost importance will be the reconciliation of mined material to determine the exploration potential of remnant zones.The 2018 surface drilling program at Eskay Creek has completed, totaling 7,732.45 metres. These results will build on the indicated resource and help towards a metallurgical optimization study.

Eskay Creek Sample Drill Results:

  • (SK-18-003), 43.39 g/t AuEq (29.49 g/t Au, 973.01 g/t Ag) over 27.70 m
    • including 89.67 g/t AuEq (58.95 g/t Au, 2,150.52 g/t Ag) over 12.15 m
  • (SK-18-002), 22.27 g/t AuEq (20.31 g/t Au, 137.34 g/t Ag ) over 34.85 m
    • including 46.94 g/t AuEq (44.52 g/t Au, 169.53 g/t Ag ) over 14.90 m
  • (SK-18-004)23.45 g/t AuEq (14.02 g/t Au, 707 g/t Ag) over 28.50 m
    • including 58.56 g/t AuEq (33.19 g/t Au, 1,903 g/t Ag) over 10.50 m

Deal Terms

Under the terms of the option agreement, Skeena may acquire a 100% interest in Eskay in consideration for:

  • Incurring C$3,500,000 in exploration expenditures
  • Payment to Barrick of C$10,000,000
  • Reimbursing Barrick for (i) reclamation expenditures incurred during the Option period and (ii) assuming the bond amount on the Property, collectively up to a maximum amount of C$7,700,000, provided that the Purchase Price will be reduced if those amounts, in aggregate, exceed C$7,700,000.

Barrick will retain a 1.0% NSR on all parts of the property which are not already subject to royalties. In addition, Barrick will maintain a back-in right to purchase a 51% interest in the property by paying Skeena up to three times its cumulative expense on the project and reimbursing Skeena for the purchase price.

*Source: Exploration and Mining in British Columbia 2008 – Ministry of Energy, Mines and Petroleum Resources mining and Minerals Division.

The technical information on this page has been reviewed and approved by Paul Geddes, P.Geo., Skeena’s Vice-President of Exploration and a Qualified Person as defined by Canada’s National Instrument 43-101.