Overview

Skeena acquired 100% interest in the past-producing Snip mine from Barrick Gold in July 2017. The property consists of one mining lease and eight mineral claims totaling approximately 4,546 hectares in the Liard Mining Division. The Snip mine produced approximately one million ounces of gold from 1991 until 1999 at an average gold grade of 27.5 g/t. 

On October 14, 2021, Hochschild Mining notified Skeena of its intention to take over as operator Snip and begin spending to earn 60% of Skeena’s interest in the Project. In order to earn 60% interest, Hochschild will need to incur expenditures of approximately C$100 million during the Option Period. After completion of the earn-in, a joint venture would be established between the parties, and Skeena would be entitled to anti-dilution protection of up to C$15 million.

In accordance with the terms of the HOA, Hochschild shall have three years as of October 14, 2021 (the “Option Period”) within which to exercise the option and earn 60% of Skeena’s interest in Snip by:

• incurring exploration and development expenditures on Snip that are no less than twice the amount of the expenditures incurred by Skeena on Snip from March 23, 2016. As of October 13, 2021, Skeena has incurred approximately C$50 million of exploration and development expenditures at Snip; and

• incurring no less than C$7.5 million in exploration or development expenditures on Snip in each 12-month period of the Option Period (or make payments to Skeena in lieu of incurring such expenditures) (the “Minimum Annual Expenditure Commitment”).

For more details on Hochschild's option, click here.

Recent Work Completed by Skeena 

In July 2020, Skeena released an underground constrained Mineral Resource Estimate for the Snip Gold Project. The Indicated resources include 244,000 ounces of gold hosted within 539,000 tonnes at an average gold grade of 14.0 g/t Au. Resources within the Inferred category include 402,000 ounces of gold hosted within 942,000 tonnes at an average gold grade of 13.3 g/t Au (Table 1).

Table 1: Snip Indicated and Inferred underground resources reported undiluted at a 2.5 g/t Au cut-off grade within stope optimized mining shapes:

  Domain Tonnes
(000)
Contained Grade
Au (g/t)
Contained Metal
Au (000 oz)
Indicated Mineral Resources        
  Main - V 165 12.8 68
  Main - S 337 15.0 163
  Twin West 37 10.4 12
Total Indicated   539 14.0 244
Inferred Mineral Resources        
  Main - V 287 13.1 121
  Main - S 599 13.4 258
  Twin West 56 12.4 23
Total Inferred   942 13.3 402

“Our efforts in the coming months will focus on expanding these now well-defined resources with expansion drilling in the newly evolving 200 Footwall Corridor as well as other near-mine targets,” notes Paul Geddes P.Geo, Vice President of Exploration & Resource Development. “In parallel with SRK, Kathi Dilworth, Skeena’s Chief Resource Geologist, has developed a very robust and defendable resource model that will formulate the basis of future economic studies.”

History of the Property

The Snip vein mineralization, discovered in 1964 by Cominco geologist Ted Muraro, lay dormant until drilled in 1986 as part of a Cominco joint venture with Netolitzky-led Delaware Resources. Those drill results triggered a massive claim staking rush and exploration boom throughout the Golden Triangle that led to the discovery and development of Barrick Gold’s Eskay Creek (past production of 3.27 million ounces of gold at a grade of 49 g/t and 158 million ounces of silver at 2,406 g/t). Other significant projects in the Golden Triangle include Pretium’s Brucejack and Valley of the Kings gold deposits, Imperial Metal’s Red Chris porphyry copper-gold mine, Teck and Novagold’s Galore Creek deposit, Teck’s Shaft Creek porphyry copper-gold deposit, Seabridge’s porphyry copper-gold Deep Kerr Project, and Ascot’s re-activated Premier Project.


Image 1: Aerial photo at Snip

The Snip deposit is an auriferous southwest-dipping shear vein system, hosted within Upper Triassic Stuhini Group feldspathic meta-sediments that are intruded by Early Jurassic age stocks and plutons. Other major deposits within the Golden Triangle are also related to compositionally similar Early Jurassic intrusions.The Snip deposit occurs within the southeast trending Bronson structural corridor which also controls the other significant deposits within the Iskut River area. Approximately 60% of the production was obtained from the Twin Zone, a 0.5 to 15 metre wide sheared quartz-carbonate-sulphide vein system that cuts through a massively bedded feldspathic greywacke-siltstone sequence. Other sub parallel structures located in the footwall to the Twin Zone accounted for the rest of the production. A barren, post mineralization dike divides the main vein into two parts for most of its length, hence the name Twin Zone. Gold mineralization occurs in one centimetre to one metre wide alternating bands of massive calcite, isseminated to massive pyrite, biotite-calcite as thin bands or streaks, or in quartz with sulphides in a crackle breccia or pyritic to non-pyritic fault gouge. Total sulphide content seldom exceeds two percent and the mineralized structures characteristically contain minor pyrrhotite, arsenopyrite, sphalerite, chalcopyrite and rare galena.

The Twin Zone occupies an east-southeast striking structure with dips ranging from 30 to 90 degrees to the southwest. The zone has been traced by drilling and mining over a strike length of approximately 1,000 metres and over a dip length of 500 metres. The deposit remains partially open along strike, and in some production areas, where the estimated cut-off grade of 24 g/t Au was below the economic limit for mining at the time.

Snip was historically burdened with the high cost of being a stand-alone operation serviced by air via the Bronson airstrip, and by hovercraft from Wrangell, Alaska by way of the Iskut River. This required high grades to ensure economic viability. Additionally, mechanized mining shrunk from approximately 82% of mine production during the first production year (1991), to approximately 16% by 1998, which resulted in a near-doubling of the unit mining cost over the mine life at the same time the gold price fell from a high of US$383 per ounce in 1994 to US$300 per ounce by 1999.

The Golden Triangle district has become one of the most important metal regions in Western Canada and is being further enhanced with recent significantly improved infrastructure, including paving of the Stewart-Cassiar highway north from Smithers, ocean port facilities for export of concentrate at Stewart, and completion of BC Hydro’s 287 kilovolt Northwest Transmission Line from Terrace to Bob Quinn Lake and north to the Red Chris mine. The hydroelectric facility at McLymont Creek, built 2 years ago, is located approximately 20 kilometres east of Snip. Road access to the McLymont Creek facility is currently within 20 kilometres of the Snip mine along predominantly flat terrain in the Iskut River valley bottom.

The prospects for redeveloping the Snip property have improved dramatically, given today’s substantially higher gold prices, subsequent improvements in infrastructure and access, the prospect of remaining high-grade mineralization and exploration upside.


Image 2: Exploration drill pad at Snip

Image 3: Technical team underground at Snip

Qualified Persons
The Independent and Qualified Person for the Eskay Creek MRE is Ms. Sheila Ulansky P.Geo., of SRK Consulting (Canada) Inc. (Vancouver), who has reviewed, validated and approved the Snip MRE as well as the technical disclosure in this release. In accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects, Mr. Paul Geddes, P.Geo. Vice President Exploration and Resource Development, is the Qualified Person for the Company and has validated and approved the technical and scientific content of this news release. The Company strictly adheres to CIM Best Practices Guidelines in conducting, documenting, and reporting its activities on its various exploration projects.

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. 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.

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