The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Mining Explorers 2023 - January 18, 2024
Skeena Resources enjoys a camp and other infrastructure left by Barrick, which operated an underground mine at Eskay Creek that produced 3.3 million oz of gold and 160 million oz of silver over 14 years of operations that ended in 2008.
High-grade ore from Snip could bolster gold production as the Eskay Creek grades begin to drop after the fifth year of mining.
With the high-grade Snip gold project fully pulled back into its portfolio, Skeena Resources Ltd. is now considering a mine at Eskay Creek that would process ore from both of the company's historic high-grade gold projects in British Columbia's Golden Triangle.
Skeena acquired both Snip and Eskay Creek from Barrick Gold Corp. under an option agreement entered into in 2016 and 2017, respectively. Over the ensuing six years, Skeena has focused most of its resources on establishing a new era of mining at Eskay Creek.
This operation began to take shape with a 2022 feasibility study that outlined plans for an open-pit mine that would produce 2.42 million ounces of gold and 66.7 million oz of silver over nine years of operations.
While the economics of this operation were robust, the company is looking at improving the metrics and extending the mine life based on a larger resource calculated in 2023, as well as processing higher-grade ore from Snip.
According to the new calculation, Eskay Creek hosts 50.1 million metric tons of open-pit-mineable measured and indicated resources averaging 2.57 grams per metric ton (4.14 million oz) gold and 63.6 g/t (102.5 million oz) silver; plus 643,000 metric tons of inferred resource averaging 1.46 g/t (30,000 oz) gold and 32.3 (668,000 oz) silver.
This marks a 257,000 oz increase in gold and a 7.9 million oz increase in silver reporting to the measured and indicated categories when compared to a resource calculation completed in 2022.
With this expanded resource, a definitive feasibility study released in November outlines a mine at Eskay Creek that will produce 2.8 million oz of gold and 81.1 million oz of silver over 12 years of operations.
Under the base case scenario prices of US$1,800/oz gold and US$23/oz silver, the open-pit mine detailed in the 2023 Eskay Creek feasibility study is expected to generate an after-tax net present value (5% discount) of C$2 billion (US$1.46 billion) and a 42.9% after-tax internal rate of return.
"With our base case after-tax NPV surpassing C$2.0 billion, Eskay Creek stands out as a rare potential Tier 1 gold mining project, located in a politically stable jurisdiction," said Skeena Resources Executive Chairman Walter Coles.
With it focus on reestablishing a mine at Eskay Creek, Skeena had previously optioned the historic Snip gold mine project to Hochschild Mining in 2021.
Last year, however, Hochschild returned full interest in Snip back to Skeena, plus the data from C$15 million of exploration and other work the Peruvian mining company carried out at the project.
Incorporating the results from 46,268 meters of drilling in 307 holes completed by Hochschild and Skeena since 2020, Snip now hosts 2.74 million metric tons of indicated resource averaging 9.35 g/t (823,000 oz) gold and 499,000 metric tons of inferred resource averaging 7.1 g/t (114,000 oz) gold.
This expanded and upgraded resource will serve as the foundation for a detailed engineering study for a mine at Snip that could deliver high-grade ore to a mill at Eskay Creek, which lies about 35 kilometers (22 miles) to the east.
The definitive feasibility study identified the potential of processing higher-grade ore from Snip as an opportunity to optimize the production profile at Eskay Creek.
"The study will demonstrate the potential benefits of adding Snip mineralization to the Eskay Creek Project as a satellite operation, likely including an increased mine life and improved concentrate payabilities at Eskay Creek," said Skeena Resources President and CEO Randy Reichert.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
Reader Comments(0)