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
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.
Barrick’s proprietary Eskay database has been held confidentially since the mine closed in 2008. The Skeena technical team is currently compiling and reviewing more than 20 years of exploration and production information, with the aim of building upon the previous geological understanding to develop an upgraded geological model. Of utmost importance will be the reconciliation of mined material to determine the exploration potential of remnant zones. In an effort to expedite a first phase of confirmation drilling on the Property, the Company is initiating surface drill permitting.
*Source: Exploration and Mining in British Columbia 2008 – Ministry of Energy, Mines and Petroleum Resources mining and Minerals Division.