Eskay Creek drilling exceeds expectations

Skeena Resources Ltd. Jan. 14 reports continued strong gold-silver intercepts during infill drilling at the Eskay Creek project in British Columbia's Golden Triangle.

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

Skeena, which acquired the property from Barrick, has identified lower grade but shallower gold and silver mineralization that can be mined from the surface.

A PEA published by the company on Nov. 7 indicates that an open-pit mine at Eskay Creek would be relatively inexpensive to develop and would yield high returns.

This PEA outlines plans for a 6,850-metric-ton-per day operation that would produce an average of 236,000 oz of gold and 5.8 million oz of silver annually over an initial mine-life of 8.6 years.

This operation is calculated to produce a net present value (5 percent discount) of US$491 million and a very robust 51 percent internal rate of return.

Both figures are after tax and are calculated based on US$1,325/oz gold and US$16/oz silver.

As a result of the low initial costs and high yield, Eskay Creek is expected to payback capital expenditures in just 1.2 years.

This PEA is based on 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.

This resource calculation does not include any of the results from the 15,000 meters of resource upgrade and expansion drilling being carried out during the 2019 phase-1 drill program at Eskay Creek.

The latest results continue to show higher grades and wider mineralized thickness than expected in the 21A zone at Eskay Creek. Highlights from these holes include:

• 36.9 meters of 10.14 g/t gold and 345 g/t silver in hole SK-19-170;

• 57.9 meters of 2.9 g/t gold and 278 g/t silver in SK-19-153;

• 61.5 meters of 4.4 g/t gold and 151 g/t silver in SK-19-151;

• 37.9 meters of 7.01 g/t gold and 114 g/t silver in SK-19-160;

• 59 meters of 4.09 g/t gold and 52 g/t silver in SK-19-148;

• 34 meters of 6.34 g/t gold and 42 g/t silver in SK-19-167; and

• 18.5 meters of 8.33 g/t gold and 51 g/t silver in SK-19-164.

"The ongoing 2019 phase I drilling program has been and continues to be very successful in that the company's drill intercepts continue to predictably validate the geometries and grades defined by the historical drilling," said Skeena Resources Vice President of Exploration Paul Geddes. "We are also quite encouraged by the improved mineralization widths and gold-silver grades as we infill and upgrade the inferred resources."

Skeena has four ground-based drill rigs on the Eskay Creek property and plans to begin its 2020 phase I infill and exploration drilling in February.

"The 2020 mandate to organically grow the current resource base at Eskay Creek will involve the allocation of approximately 30 percent of the current drill budget to exploratory step out drilling," said Geddes.

–SHANE LASLEY