BC explorers adapt to challenging 2020
Some mix of pandemic, weather, and slow assays tested all Mining Explorers 2020 - Published January 19, 2021
Last updated 2/4/2021 at 4:01pm
Challenged by a global pandemic and a particularly wet summer, many of Northern British Columbia's mineral explorers became adept to adjusting on the fly as they endeavored to unlock the rich precious, base, and battery metals potential of this section of the Pacific Cordillera.
With companies like Skeena Resources Ltd. and Ascot Resources Inc. running year-round drill programs as they seek to establish a new era of gold-silver mines at historic operations in the Golden Triangle, Northern BC's 2020 mineral exploration season got off to a strong start.
By mid-March, however, everything changed as the COVID-19 pandemic cast an enormous shadow of doubt over what was shaping up to be a pivotal year for Northern BC's mining sector.
With travel restrictions and safety protocols rapidly implemented to prevent the spread of coronavirus, the ability to salvage the 2020 exploration season became uncertain. This uncertainty was compounded by turmoil in the stock markets that saw the share prices of many mineral exploration companies plummet 35 to 45% over a three-week span at the onset of the pandemic.
Working closely with First Nations, provincial, and federal governments, Northern BC mining and mineral exploration companies rose to the challenge, and by mid-June drills were once again turning across the mineral-rich region.
While the proactive work of all involved helped to reclaim much of the 2020 exploration season, later than planned starts to programs, rainy days with low cloud ceilings, and a sudden influx of drill core being delivered to assay labs dealing with their own COVID-related challenges had Northern BC mineral explorers constantly adjusting to make the most of a nearly lost year.
Revisiting historic mines
Skeena and Ascot proved to be particularly skillful in adjusting to the obstacles offered up during 2020 as they advanced what are shaping up to be Golden Triangle's next generation of mines.
Skeena, in fact, not only met its original targets but exceeded them as it continued to build momentum towards its goal of completing a feasibility study for developing an open-pit mine at its iconic Eskay Creek gold-silver project.
Home to a historic underground mine operated by Barrick Gold Corp., Eskay Creek produced roughly 3.3 million ounces of gold and 160 million oz of silver from 1994 to 2008. With ore that averaged 45 grams per metric ton gold and 2,224 g/t silver, this was the world's highest-grade gold mine at the time.
With an eye on rapidly advancing its vision of revitalizing Eskay Creek as an open-pit gold-silver mine, Skeena had drills turning on the property in late February. With the drills idling in March due to COVID-19 restrictions, the company had only completed 4,200 meters of its originally planned 26,000-meter initial phase of 2020 drilling in June.
While the start may have been slow, the company began building momentum toward mid-2020.
By mid-June, Skeena had two drills turning at Eskay Creek incrementally increasing the number of rigs in accordance with the company's COVID-19 strategy. By October, the company had 11 drills drill rigs readying surface mineable resources at the iconic Northern British Columbia gold-silver mine property for a prefeasibility study slated for completion this year.
By the end of the year, Skeena had completed roughly 88,000 meters of drilling – approximately 71,000 meters upgrading and expanding the resources in and around the planned open-pit, with the balance testing exploration targets on the property.
Ascot, which is advancing a new generation of operations at the historic Premier gold-silver mine on the outskirts of Stewart, a mining town at the southern tip of the Golden Triangle, also got off to a slower-than-planned start to 2020 but finished the year strong.
Premier, which includes a mill, assay lab, crusher, tailing storage area, underground workings, and other infrastructure from 1990s era operations, provides Ascot with a vanguard toward its plan to resume mining in the Stewart area.
A feasibility study on breathing new life into this historic gold-silver mine was being finalized about the time the COVID-19 pandemic hit, which affected every aspect of life, even crossing the T's and dotting the I's on a mine engineering and economic study.
Finished up in April, the feasibility study outlined a financially robust mine expected to produce roughly 1.1 million ounces of gold and 3 million oz of silver over an initial eight-year mine life.
This production is based on 3.63 million metric tons of probable reserves averaging 5.45 g/t (637,000 oz) gold and 19.1 g/t (2.23 million oz) silver within the Silver Coin, Big Missouri and Premier deposits; plus 2.55 million metric tons of proven and probable reserves averaging 6.52 g/t (534,000 oz) gold and 20.6 g/t (1.69 million oz) silver on the nearby Red Mountain property.
At US$1,400/oz gold– the base case metals prices scenario – the operation outlined in the feasibility study generates an after-tax net present value (5% discount) of C$341 million, a 51% internal rate of return and a capital payback period of just 1.8 years.
"The completion of the feasibility study marks an important milestone for Ascot in the progression of restarting the project," said Ascot Resources President and CEO Derek White. "The current strong gold price environment, robust projected economics and quick payback creates an attractive opportunity to build our mine."
While finalizing permitting and ordering long lead-time items to restart Premier mining, Ascot completed roughly 15,000 meters of drilling targeting extensions to the deposits in the resource and potential new deposits on the property.
Ascot, which drills higher elevation targets in the middle of summer, which is typically the best time for helicopter access, was forced to adjust its schedule this year. As a result, the company spent more time testing a high-grade gold zone immediately northwest of the proposed mining areas outlined in the feasibility study.
With intercepts like 24.15 meters averaging 3.74 g/t gold, including six meters of 40.78 g/t (1.31 oz/t) gold, being held to lower elevations was not all bad.
Adjusting its drilling to the inclement weather offered to this part of BC in 2020, Ascot was able to test higher elevation targets later in the summer.
"Despite difficult weather conditions, we have two rigs operating on our less accessible, higher elevation targets at Silver Hill and the Day zone," White said in August.
And the results were worth the wait.
One hole drilled at Day cut 2.05 meters of 54.6 g/t (1.76 oz/t) gold and a hole drilled at the aptly named Silver Hill cut one meter of 1,320 g/t (42.4 oz/t) silver.
Every company exploring BC's Golden Triangle was affected by some combination of COVID-19, weather, and a slow return of assay results during 2020.
While StrikePoint Gold Inc. was faced with all three, its crews met their targets at the company's high-grade Willoughby gold-silver and Porter Silver projects near Stewart.
"I am exceptionally proud of our team's productivity and success in meeting operational milestones and goals, despite challenging weather conditions all summer, and heightened safety protocols being implemented," said StrikePoint Gold President and CEO Shawn Khunkhun.
StrikePoint kicked off its 2020 field work in late July with a program focused on improving continuity of high-grade mineralization at Willoughby and testing broad zones of disseminated gold and silver mineralization encountered in previous drilling and surface sampling on this gold-silver project about four miles (seven kilometers) east of Ascot's Red Mountain Mine project.
While awaiting results from sampling and seven holes drilled at Willoughby, StrikePoint geologists investigated Porter, a past producing high-grade silver property on Mount Rainey overlooking the town of Stewart.
The company believes high-grade silver ore mined from Prosperity-Porter Idaho and Silverado mines at the dawn of the 20th century could represent opposite ends of a larger mineralized system. Recent glacial retreat has exposed areas of Mount Rainey between these past-producing mine sites, providing the opportunity to explore for a connection between the deposits.
"Our primary goal is to discover new silver veins in order to connect the Silverado mine on the north side with the Prosperity-Porter Idaho mines on the south side of the mineralized structural corridor," said Khunkhun.
Much like many of its Golden Triangle colleagues, Enduro Metals Inc. (formerly Crystal Lake Mining Corp.) was confronted by both pandemic protocols and weather as it set out to explorer the gold, silver, and copper mineralization being exposed by the rapidly retreating glaciers in the high mountain country at its Newmont Lake project.
"Unpredictable weather made for a dynamic start to the exploration season," said Enduro Metals President and CEO Cole Evans.
Despite the dynamic start, Enduro managed to complete a 4,688-meter summer drill program, along with geophysics, mapping, and sampling at Newmont Lake during 2020.
Longtime Golden Triangle explorer Seabridge Gold Inc. nearly shelved 2020 work programs on its gold-copper projects in the area.
While Seabridge did significantly scale back exploration of its world-class KSM project about 65 kilometers (40 miles) north of Stewart, the company decided to move ahead with an 8,961-meter drill program at its earlier staged Iskut project.
"We wrestled with the challenge of implementing a drill program this season during the COVID-19 pandemic but our team has worked closely with our Tahltan Nation partners, the BC Health Ministry, suppliers and other exploration companies in the area to develop effective procedures for operating in the current global health crisis," said Seabridge Gold Chairman and CEO Rudi Fronk.
Having already outlined enough reserves to support a mine at KSM capable of producing an average of 540,000 oz gold, 156 million lb copper, 2.2 million oz silver, and 1.2 million lb molybdenum annually for 53 years, further resource drilling at this enormous project is not needed.
Seabridge, however, did want to test its geological ideas for similar porphyry mineralization at Iskut, which lies about 30 kilometers (19 miles) west of KSM.
"Seabridge acquired the large land package at Iskut because we saw clear evidence of a porphyry system with many of the characteristics of our giant KSM project in rocks of the same age," Fronk said.
Much like Seabridge, GT Gold Corp. worked with local First Nations before deciding to carry out a 2020 drill program on its exciting Tatogga gold-copper-silver property.
While GT Gold's 2020 Tatogga field program got started roughly two months later than originally planned, the company had plenty of work to do in preparing for an updated resource estimate for the Saddle North copper-gold porphyry deposit at Tatogga.
According to this calculation completed in July, Saddle North hosts 298 million metric tons of indicated resource averaging 0.28% (1.81 billion pounds) copper, 9.36 g/t (3.47 million oz) gold, and 0.8 g/t (7.58 million oz) silver; plus 543 million metric tons of inferred resource averaging 0.25% (2.98 billion lb) copper, 0.31 g/t (5.46 million oz) gold, and 0.7 g/t (11.64 million oz) silver.
After postponing the start of its 2020 program, GT Gold launched a roughly 4,481-meter drill campaign at Quash Pass, a promising copper-gold-silver target about seven kilometers (4.3 miles) southwest of Saddle North.
In order to better implement federal, provincial and Tahltan First Nation COVID-19 protocols and guidelines, GT Gold based this program out of Bear Paw, a highway-accessible lodge that offers running water, individual rooms, full kitchen, bathrooms, showers and other advantages.
The porphyry mineralization in GT Gold's Saddle North deposit is very similar to the deposits at Newcrest Mining Ltd. (70%) and Imperial Metals Corp.'s (30%) Red Chris mine about 20 kilometers (12.5 miles) to the east.
Despite the pandemic and weather hurdles of 2020, Newcrest continued Red Chris exploration at a brisk pace.
By the end of the third quarter of 2020, Newcrest had completed 67,690 meters of drilling at Red Chris in the little over a year since acquiring a joint venture interest in the mine.
Battery metals in the triangle
While oft overshadowed by the gold, copper and silver for which it is renowned, the Golden Triangle is emerging as a potential source of the nickel and cobalt needed for the lithium-ion batteries powering electric vehicles and storing renewable energy.
Garibaldi Resources Corp.'s Nickel Mountain project about 18 kilometers (11 miles) southwest of the historic Eskay Creek mine hosts some of the highest nickel grades ever tapped in a magmatic sulfide deposit.
One hole drilled into the E&L intrusion at Nickel Mountain during 2017 cut 16.8 meters averaging 8.3% nickel, 4.2% copper, 0.19% cobalt, 1.96 g/t platinum, 4.5 g/t palladium, 1.1 g/t gold. and 11.1 g/t silver.
The 2020 drill program tapped the widest section of mineralization so far at E&L. This hole cut 151.7 meters averaging 0.56% nickel, 61% copper, 0.02% cobalt, 0.25 g/t platinum, 0.5 g/t palladium, 0.26 g/t gold, and 2.8 g/t silver; including a 1.2-meter high-grade section averaging 4.6% nickel, 2.3% copper, 0.18% cobalt, 0.23 g/t platinum, 0.39 g/t palladium, 0.39 g/t gold, and 7.6 g/t silver.
When the inclement weather made access to the top of Nickel Mountain difficult or dangerous, Garibaldi crews investigated Casper, a gold vein target at lower elevation and within 1,000 meters of road access and hydroelectric power.
Out of 165 samples collected with 250 meters of the outcropping Casper vein, 13 returned gold grades of more than 10 g/t, including one sample with 249 g/t gold.
"Even at this early stage, it's remarkable to see such consistent elevated gold grades in a quartz vein extending more than 120 meters that remains open," said Garibaldi Resources Vice President of Exploration Jeremy Hanson.
This gold discovery may not have even been investigated during 2020 if it were not for the rainy days keeping geologists off their main target near the top of Nickel Mountain.
Giga Metals Corp. is hoping to develop a battery metals mine at its more advanced but lower grade Turnagain project further north in BC's Golden Triangle.
In October, the company published a preliminary economic assessment that outlines a mine at Turnagain that would produce an average of 33,215 metric tons of nickel and 1,962 metric tons of cobalt annually over a 37-year mine life.
This PEA is based on 1.07 billion metric tons of measured and indicated resource averaging 0.22% (5.21 billion pounds) nickel and 0.13% (312.4 million lb) cobalt; plus 1.14 billion metric tons of inferred resource averaging 0.217% (5.47 billion lb) nickel and 0.013% (327.3 million lb) cobalt.
While the PEA confirms the ability of Turnagain to produce high-quality nickel-cobalt concentrate needed for lithium-ion batteries in a socially and environmentally responsible manner, the economics of the operation outlined in the assessment are weak at current nickel prices.
Giga Metals, however, points out that the project economics are comparable to nickel mines currently in production and development and the base case price scenario is much lower than the expected nickel prices as battery and EV manufacturers vie for limited supplies of the metal.
"The market believes that most of the demand for battery grade nickel will be filled by new HPAL (high pressure acid leach) projects, which are expected to be built within schedules and budgets that are unprecedented compared to the previous HPAL operations that have been commissioned in the last 25 years" said Giga Metals Martin Vydra. "These projects, like the Turnagain project, have marginal economics at current nickel prices."
The company's internal analysis finds that the Turnagain mine outlined in the PEA is competitive with other HPAL projects and has the added benefit of being carbon-neutral, an important bonus for carmakers that want to lower the overall carbon footprint of manufacturing their zero-emission vehicles.
Beyond the triangle
While the Golden Triangle rightfully nabs much of the attention, this region does not tell the full story of mineral exploration in Northern BC.
In fact, the most prolific 2020 drill program, and likely the largest 2021 program in the northern reaches of this mineral-rich province was outside of Golden Triangle's bounds.
After raising C$50 million around mid-2020, Benchmark Metals Inc. announced plans to complete upwards of 300,000 meters of drilling at its Lawyers gold-silver project in northcentral BC by the end of 2021.
Situated about 45 kilometers (28 miles) northwest of the world-class Kemess gold-copper porphyry deposit, Lawyers is home to a small underground mining operation that produced 171,200 ounces of gold and 3.6 million oz of silver over a four-year period beginning in 1989.
With the roughly 100,000 meters of drilling completed in 2020 and the planned 200,000 meters planned for 2021, Benchmark aims to build at least a 5-million-oz gold-equivalent resource in four zones at Lawyers and quickly advance the project toward mine studies.
Benchmark Metals CEO John Williamson said the company plans to "execute systematic work programs over the next two years to go beyond the PEA (preliminary economic assessment) towards a feasibility study."
In addition to the very large drill campaign, this accelerated schedule requires a large amount of engineering, permitting and baseline environmental work to develop and support a mining scenario for Lawyers.
To meet this accelerated schedule, Benchmark has established a larger and winterproof camp and other infrastructure needed to carry out the year-round exploration aimed at unveiling Lawyers' inherent potential.
Just south of the Golden Triangle, Dolly Varden Silver Corp. completed a robust 2020 drill program targeting the expansion of high-grade silver on its namesake project.
"Our priority is the discovery of more high-grade silver mineralization, which we expect to accomplish with 80% of drilling at new targets and 20% in high-priority resource expansion areas," said Dolly Varden Silver President and CEO Shawn Khunkhun.
Much of the resource expansion drilling targeted extensions of the Torbrit deposit, which hosts the bulk of 3.42 million metric tons of indicated resource averaging 299.8 g/t (32.93 million oz) silver; plus 1.29 million metric tons of inferred resource averaging 277 g/t (11.48 million oz) silver outlined at Dolly Varden.
Early highlights from this expansion drilling includes one hole that cut 12.8 meters averaging 351 g/t silver beyond the resource.
"We have been very encouraged with recent drilling success, particularly with step out high-grade silver intercepts targeting extension of the Torbrit deposit," said Khunkhun.
Raising C$10 million in August and another C$7 million in October, Dolly Varden expanded its 2020 program to 10,000 meters and looks set for an even bigger program for 2021.
Hopefully, Dolly Varden and its fellow explorers in northern BC will have a few less challenges to surmount in the coming year.