New high-grade gold zone at Eskay Creek

Skeena Resources Ltd. Oct. 22 said drills have tapped high-grade gold in newly identified mineralized horizon below the current resource at the Eskay Creek project in British Columbia's Golden Triangle.

Skeena, which acquired Eskay Creek from Barrick Gold Corp. in 2017, is focused on expanding and upgrading near surface, high-grade gold resources that could be developed into an open pit mine.

According to a resource calculated early in 2019, Eskay Creek hosts 12.71 million metric tons of surface mineable indicated resource averaging 4.5 g/t (1.82 million oz) gold and 117 g/t (47.79 million oz) silver; plus 13.57 metric tons of surface mineable inferred resource averaging 2.2 g/t (984,000 oz) gold and 42 g/t (18.46 million oz) silver.

With the goal of upgrading the inferred resources to the higher confidence indicated category, the company has two surface drill rigs targeting the 21A, 21E and 22 zones with roughly 200 shallow holes during the 2019 phase 1 program.

Two of the holes drilled during this program – SK-19-063 and SK-19-067 – were extended below the inferred resource to test the exploration potential of a lesser known mineralized mudstone horizon. Dubbed Lower Mudstone, this new mineralized horizon is roughly 100 meters below the Contact Mudstone, the stratigraphy that hosts the deposits historically mined at Eskay Creek deposits.

Encountering the Lower Mudstone horizon at 110.32 meters, hole SK-19-063 cut 2.21 meters averaging 312.81 grams (10 ounces) per metric ton gold and 95 g/t silver. This included a 0.5-meter section with considerable visible gold and returning assays of 1,380 g/t (44.4 oz/t) gold and 322 g/t silver.

This mineralization is further corroborated by SK 19-067, which cut 1.5 meters of 8.02 g/t gold and a small amount of silver; and a 1989 hole that cut six meters of 5.8 g/t gold and 5.75 g/t silver.

"Very high grades of gold mineralization hosted within the largely underexplored and undeveloped Lower Mudstone clearly demonstrate that another high-tenor mineralization event occurred in the Eskay Creek stratigraphy," said Skeena Resources Vice President of Exploration and Resource Development Paul Geddes. "Both the regional and near mine mineralized intersections within this largely underexplored horizon represents a significant exploration target for the Eskay Creek project."

Skeena said Lower Mudstone is essentially analogous to the main Contact Mudstone in that it occurs at a mineralized time break between periods of volcanic activity. The stratigraphic and mineralization cyclicity within a volcanic pile is a common feature to volcanic hosted massive sulfide deposits like those at Eskay Creek.

Averaging roughly five to 15 meters thick, Lower Mudstone has been traced by historical drilling for over 5,000 meters along strike.

"The company's detailed understanding of this mineralized system will allow future exploratory drill targeting to focus on instances where this auriferous (gold bearing) horizon links to the known mineralized synvolcanic feeder zones and paleo-depressions in the mudstone," said Geddes.

In addition to encountering high-grade gold in Lower Mudstone, the ongoing drill program at Eskay Creek continues to predictably upgrade the inferred mineralization hosted in the 21A Zone.

Highlights from recent resource upgrade holes include:

• 37.5 meters of 3.34 g/t gold and 56 g/t silver from a depth of 44 meters in SK-19-065; and

• 30.5 meters of 4.02 g/t gold and 79 g/t silver from a depth of 40 meters in SK-19-066.

Skeena started its planned 15,000-meter phase 1 drill program at Eskay Creek by targeting areas that required helicopter support. With this drilling now complete, the rigs are now being converted to ground-based skid mounts.

During this transition, one helicopter supported rig has been mobilized to the company's Snip Project to perform surface-based drill testing of the 200 Footwall Corridor.

Operated by Barrick in the 1990s, the historic underground mine at Snip produced 1.1 million ounces of gold from 1.25 million metric tons of ore averaging 27.5 g/t gold.

Barrick also operated an underground mine at Eskay Creek from 1995 to 2008 that produced roughly 3.3 million oz of gold and 160 million oz of silver from ore that averaged 45 g/t gold and 2,224 g/t silver.

Not only have gold prices increased five-fold from the US$300/oz since Barrick opted to wind down operations at Snip, but the infrastructure in the Golden Triangle has improved significantly in recent years. These factors, combined with the exploration upside at Snip, bode well for revitalizing this high-grade gold mine.

–SHANE LASLEY