Mr. Walter Coles Jr. reports
SKEENA ANNOUNCES MAIDEN RESOURCE ESTIMATE FOR ESKAY CREEK
Skeena Resources Ltd. has released a mineral resource estimate for the Eskay Creek project, which has been reviewed and validated by SRK Consulting (Canada) Inc. This MRE was derived from 7,583 historical surface and underground diamond drill holes totalling 651,332 metres. Drilling data from the company's recently initiated and continuing phase 1 metallurgical and infill drilling program is not included in this MRE. The effective date of this MRE is Sept. 18, 2018, and a technical report will be filed on the company's website and SEDAR within 45 days of this disclosure. For additional Eskay Creek maps, please view the company's website.
Pit-constrained resources
The pit-constrained indicated resource includes 207,000 gold-equivalent ounces within 1.09 million tonnes at an average gold-equivalent grade of 5.9 grams per tonne. The pit-constrained inferred resource includes 589,000 ounces within 4.26 million tonnes at an average gold-equivalent grade of 4.3 g/t.
INDICATED AND INFERRED PIT CONSTRAINED RESOURCES REPORTED AT A 1.0 G/T AuEQ CUT-OFF GRADEGrade AuEq oz Contained ouncesTonnes AuEqAuAg AuAg Zone (000) g/t g/t g/t Oz (000) Oz (000)Oz (000)Indicated 21A1,0885.9 4.972 207173 2,533 Inferred21A2,8094.6 3.863 418342 5,653221,4523.7 2.589 171116 4,151 Total indicated1,0885.9 4.972 207173 2,533 Total inferred 4,2614.3 3.372 589458 9,805
Underground resources
The underground indicated resource estimate includes 814,000 gold-equivalent ounces within 2.51 million tonnes at an average gold equivalent grade of 10.1 g/t. The underground inferred resource estimate includes 261,000 ounces within 810,000 tonnes at an average gold equivalent grade of 10.0 g/t.
INDICATED AND INFERRED UNDERGROUND RESOURCES REPORTED AT A 5.5 G/T AUEQ CUT-OFF GRADE Grade AuEq ozContained ounces Tonnes AuEq AuAg AuAg Zone(000) g/tg/t g/tOz (000)Oz (000)Oz (000)Indicated 21C 6749.67.5 154207 163 3,33521B 338 12.18.6 26313294 2,855 21BE 246 10.16.8 247 8053 1,95421E41 10.86.3 337 14 8 441 HW 522 10.26.2 295171 105 4,957NEX 5109.66.8 209158 112 3,432Pumphouse727.96.1 140 1814 323109 1119.59.412 343442Total indicated 2,513 10.17.2 215814 58217,340Inferred21C447.26.738 10105521B 262 10.57.8 206 8966 1,738 21BE 114 15.39.5 431 5635 1,57321E538.54.6 292 14 8 495 HW878.45.0 256 2414 718NEX 2208.56.8 130 6148 922Pumphouse307.86.6928 688109 27.47.3 80.4 0.4 0.4Total inferred812 10.07.2 214261 187 5,590
Walter Coles, Skeena's president and chief executive officer, commented: "This initial resource estimate validates our thesis that there are substantial amounts of potentially economic mineralization left at Eskay Creek below the cut-off grades used by historical operators of the mine. As this resource estimate has been optimized for gold and silver, future resource estimates will also include base metal credits. In addition, we believe the property has exciting exploration upside for both precious and base metals at depth."
Paul Geddes, vice-president of exploration and resource development, further adds: "The mineral resource estimate at Eskay Creek demonstrates excellent-grade continuity and precious metal tenor. Also, the methodology of applying the understanding of geology and mineralization controls into the rigorous estimation process make this estimate very robust such that it can accurately inform future economic analyses and optimizations. Underground resources occur immediately adjacent to or within 100 metres of existing underground infrastructure, and although all historical drift and fill stopes have been backfilled, we elected to exclude any potential resources that occur within three metres of any historical development."
PIT-CONSTRAINED AND UNDERGROUND SENSITIVITIES TO AUEQ (G/T) CUT-OFF GRADEAuEq COG (g/t)Tonnes (000) AuEq (g/t) Au (g/t)Ag (g/t)AuEq Oz (000) Au oz (000)Ag Oz (000)Indicated categoryPit constrained >0.75 1,1675.64.768209 1752,568>1.00 1,0885.94.972207 1732,533>1.25 1,0056.35.377204 1712,482Underground >4.00 4,0088.15.9 1621,038 758 20,878>4.50 3,4148.76.3 181957 693 19,872>5.00 2,9239.46.8 198883 635 18,576>5.50 2,513 10.17.2 215814 582 17,339>6.00 2,171 10.77.7 232750 534 16,192Inferred categoryPit constrained >0.75 4,8663.93.064606 473 10,026>1.00 4,2614.33.372589 4589,805>1.25 3,7314.83.779570 4439,519Underground >4.00 1,6827.45.4 142398 2917,702>4.50 1,2628.26.0 166333 2436,736>5.00 1,0049.16.6 189294 2126,115>5.50 812 10.07.2 214261 1875,590>6.00 661 11.07.8 242233 1655,133
Eskay Creek deposit mineral resource estimate notes:
The mineral resources disclosed in this press release were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum standards on mineral resources and reserves definitions, and guidelines prepared by the CIM standing committee on reserve definitions and adopted by the CIM council.
Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resources estimated will be converted into mineral reserves. As defined by National Instrument 43-101, the independent and qualified person for the Eskay Creek MRE is Sheila Ulansky, PGeo, of SRK Consulting (Canada), who has reviewed and validated the Eskay Creek MRE. The effective date of the MRE is Sept. 18, 2018. Resources are reported in situ and undiluted for both pit-constrained and underground scenarios, and are considered to have reasonable prospects for economic extraction. In accordance with NI 43-101 recommendations, the number of metric tonnes was rounded to the nearest thousand. Any discrepancies in the totals are due to rounding effects. Mineralization occurring within three metres of historical underground workings is not included in this MRE. Metal prices used for the AuEq calculation are $1,275 (U.S.) per ounce of gold and $17 (U.S.) per ounce of silver. AuEq equals Au (g/t) plus [Ag (g/t) divided by 75]. Metallurgical recoveries of 80 per cent AuEq were utilized in the determination of cut-off grades for underground resources. The calculated pit-constrained cut-off grade was determined to be 0.7 g/t AuEq and the underground cut-off grade was determined to be 4.1 g/t AuEq. Cut-off grades must be re-evaluated considering prevailing market conditions (including gold prices, exchange rates and costs). At the request of the company, the pit-constrained resources are reported at a higher cut-off grade of 1.0 g/t AuEq and underground resources are reported at a cut-off grade of 5.5 g/t AuEq. Block tonnage was estimated from volumes using a bulk density formula that was applied using interpolated lead, zinc, copper and antimony grades. This density formula was derived from the historic operator based on comparisons between actual measurements and analysis at the Eskay Creek mine. SG equals (Pb plus Zn plus Cu plus Sb) multiplied by 0.03491 plus 2.67 (where all metals are reported in per cent).Ten mineralization domains were created to constrain the estimate -- two pit-constrained domains and eight underground domains. Each stratiform massive sulphide domain was defined by individual wireframes created in Leapfrog Geo (Seequent) software using geologically realistic numeric interpolants within major fault blocks. Mineralization domains were created using a 40 to 50 per cent probability of a nominal combined precious and base metal cut-off grade being greater than 0.9 to 1.0 g/t AuEq depending on the domain. Each domain was modified or reassessed individually to consider presiding mineralization features. Although domaining was initially constrained using a combination of Au, Ag, Cu, Pb and Zn, the primary metals considered for this resource estimate are Au and Ag. High-grade capping was performed on each domain using raw assay data before applying one-metre composites within hard domain boundaries and using equally distributed composite tails. Gold capping values ranged from 30 to 350 g/t and silver capping values ranged from 200 to 15,000 g/t. Gold and silver variograms were used to determine the spatial relationship of the variables over distance. Search orientations were created using the dynamic anisotropy function in Vulcan software using a single surface, which mimicked the local lithological units.Ordinary kriging (OK) was used for the estimation of gold and silver in all domains, except for the 22 and 21E zones where an inverse distance squared (ID2) interpolation was selected because too few samples were available to derive meaningful variograms. Resources were estimated using Maptek Vulcan 10.1.5 software from drill hole sampling in a model using a parent block size of three m by three m by two m and subblock size of one m by one m by one m. The mineral resources were estimated using three passes with increasing search radii based on variogram ranges.Estimation ranges varied between 35 to 60 metres and 30 to 60 metres for gold and silver respectively, depending on the domain.Indicated and inferred resources were categorized during gold interpolation passes one and two respectively.The indicated category is defined by blocks interpolated using a minimum of five holes and a maximum distance of 30 metres to a drill hole showing reasonable geological and grade continuity. In areas where blocks were interpolated during pass 1 but continuity is insufficient or blocks were isolated, the blocks were reclassified to inferred on a visual basis. Inferred resources (pass 2) were interpolated using a minimum of three holes and a maximum distance to a drill hole composite of 60 metres. Due to the lower drill hole density in the 22 and 21E zones, a minimum of two holes were required.A final third pass using three times the variogram range was used to infill any unestimated blocks. These blocks are uncategorized and are neither inferred nor indicated resources.Estimates use metric units (metres, tonnes and g/t). Metal contents are presented in troy ounces (metric tonne times grade divided by 31.10348). Neither the company, nor SRK, is aware of any known environmental, permitting, legal, title-related, taxation, socio-political, marketing or other relevant issue that could materially affect this mineral resource estimate. The abundance and significance of arsenic (As), mercury (Hg) and antimony (Sb) are unknown but currently under evaluation.The quantity and grade of reported inferred mineral resources in this estimation are uncertain in nature and there has been insufficient exploration to redefine these inferred mineral resources as indicated mineral resources. It is uncertain if further exploration will result in upgrading them to the indicated mineral resources category.
PIT CONSTRAINED SCENARIO ASSUMPTIONS FOR DETERMINING CUT-OFF GRADES WITH REASONABLE PROSPECTS OF ECONOMIC EXTRACTIONInput parameters Value UnitPit wall angles 45DegreesReference mining cost$2.00 U.S. dollars per tonne minedMining recovery 95 Per centMining dilution5 Per centProcessing cost $15.00 U.S. dollars per tonne processedGeneral and administration $5.75 U.S. dollars per tonne processedProcess recovery Au80%PercentProcess recovery Ag90%PercentSell price Au$1,250.00 U.S. dollars per ounceSell price Ag $17.00 U.S. dollars per ounceSell cost $30.00 U.S. dollars per ounceCombined strip ratio 2.9:1 Unitless
UNDERGROUND SCENARIO ASSUMPTIONS FOR DETERMINING CUT-OFF GRADES WITHREASONABLE PROSPECTS OF ECONOMIC EXTRACTIONInput parameters ValueUnitReference mining cost $79.25U.S. dollars per tonne minedProcessing cost $15.00 U.S. dollars per tonne milledGeneral and administration $5.75 U.S. dollars per tonne milledProcess recovery Au80%Per centProcess recovery Ag90%Per centSell price Au$1,275.00U.S. dollars per ounceSell price Ag $17.00U.S. dollars per ounceSell cost Au$30.00U.S. dollars per ounce
Eskay Creek mineralization
The Eskay Creek deposits represent a precious and base metal-rich volcanogenic massive sulphide deposit, hosted in volcanic and sedimentary rocks of the lower to middle Jurassic Hazelton Group. Mineralization is contained in several stratiform, disseminated and stockwork vein zones that display a variety of textural and mineralogical characteristics. The bulk of the mineralization is hosted in the 21B zone, a tabular stratiform lens that consists of well-bedded, clastically reworked sulphides and sulphosalts interbedded with unmineralized, carbonaceous argillite. In addition to extremely high precious metal grades, Eskay Creek is distinguished from conventional VMS deposits by its association with elements of the epithermal suite (Sb-Hg-As), sulphosalt-rich mineralogy, and the dominance of clastic sulphides and sulphosalts.
Qualified persons
The independent and qualified person for the Eskay Creek MRE is Ms. Ulansky, PGeo, of SRK Consulting (Canada) (Vancouver), who has reviewed, validated and approved the Eskay Creek MRE as well as the technical disclosure in this release. In accordance with National Instrument 43-101 -- Standards of Disclosure for Mineral Projects, Mr. Geddes, PGeo, vice-president, exploration and resource development, is the qualified person for the company, and has validated and approved the technical and scientific content of this news release. The company strictly adheres to CIM Best Practices Guidelines in conducting, documenting and reporting its activities on its various exploration projects
About Skeena Resources Ltd.
Skeena Resources is a junior Canadian mining exploration company focused on developing prospective precious and base metal properties in the Golden Triangle of northwest British Columbia, Canada. The company's primary activities are the exploration and development of the past-producing Snip mine and the recently optioned Eskay Creek mine, both acquired from Barrick. In addition, the company has completed a preliminary economic assessment on the GJ copper-gold porphyry project.
ESKAY CREEK DEPOSIT TOTAL INDICATED AND INFERRED RESOURCESGrade AuEq oz (000) Contained ouncesZone Tonnes (000) AuEq (g/t) Au (g/t) Ag (g/t) Au oz (000) Ag oz (000)Indicated mineral resourcesPit constrained21A 1,0885.94.9 72207173 2,533Underground21C 6749.67.5154207163 3,335 21B 338 12.18.6263132 94 2,85521BE 246 10.16.8247 80 53 1,954 21E41 10.86.3337 148 441HW 522 10.26.2295171105 4,957 NEX 5109.66.8209158112 3,432 Pumphouse727.96.1140 18 14 323 109 1119.59.4 12 34 3442Total underground2,513 10.17.221581458217,340Total indicated3,6018.86.51721,02075519,873inferred mineral resourcesPit constrained21A 2,8094.63.8 63418342 5,65322 1,4523.72.5 89171116 4,151Total pit constrained4,2614.33.3 72589458 9,805Underground21C447.26.7 38 10 1055 21B 262 10.57.8206 89 66 1,73821BE 114 15.39.5431 56 35 1,573 21E538.54.6292 148 495HW878.45.0256 24 14 718 NEX 2208.56.8130 61 48 922 Pumphouse307.86.6 928688 109 27.47.380.40.4 0.4Total underground812 10.07.2214261187 5,590Total inferred 5,0735.24.0 9485064515,395
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