Mr. Walter Coles reports
SKEENA INTERSECTS 23.45 G/T AUEQ OVER 28.50 METRES AT ESKAY CREEK
Skeena Resources Ltd. has released additional gold-silver assay results for five holes from the continuing phase 1 surface drilling program at the Eskay Creek project located in the Golden Triangle of British Columbia. Base metal results are pending and will be disclosed once available. The multifaceted phase 1 program is being performed in the historically drill-defined 21A, 21C and 22 zones. Reference images are presented on the company's website.
Eskay Creek phase 1 drilling highlights:
14.02 grams per tonne gold, 707 g/t silver, 23.45 g/t gold equivalent over 28.50 metres (SK-18-004)including: 33.19 g/t Au, 1,903 g/t Ag, 58.56 g/t AuEq over 10.50 m; 22.13 g/t Au, 193 g/t Ag, 24.69 g/t AuEq over 11.90 m (SK-18-005)including: 31.33 g/t Au, 278 g/t Ag, 35.03 g/t AuEq over 8.25 m;28.97 g/t Au, 15 g/t Ag, 29.17 g/t AuEq over 12.95 m (SK-18-006).
Gold equivalent (AuEq) was calculated with the formula: Au (g/t) plus (Ag (g/t) divided by 75). Reported core lengths represent 80 to 100 per cent of true widths and are supported by well-defined mineralization geometries derived from historical drilling. Length-weighted AuEq composites were constrained by geological considerations as well as a calculated 1.0 g/t AuEq assay grade cut-off assuming reasonable prospects for economic extraction via open-pit mining methods. Grade capping of individual assays has not been applied to the Au and Ag assays informing the length-weighted AuEq composites. Processing recoveries have not been applied to the AuEq calculation and are disclosed at 100 per cent due to a lack of supporting information. Samples below detection limit were nulled to a value of zero.
Phase 1 drilling discussion
The phase 1 drilling program on the 21A, 21C and 22 zones is designed to upgrade inferred resources to indicated resources in areas with low drill density to allow for future economic analyses and to collect fresh core for a planned metallurgical characterization and testing program. No historical drill core remains for any zones at Eskay Creek. Therefore, new material must be collected for metallurgical evaluations. Over all, the metallurgical program is designed to gather unbiased, representative material that is spatially distributed throughout the various zones that will ultimately be used to optimize future mine planning. Core lengths represent 80 to 100 per cent of true widths and are supported by well-defined mineralization geometries derived from historical drilling.
The 21A zone represents a significant portion of the pit-constrained resources hosted at Eskay Creek containing indicated resources of 207,000 ounces AuEq grading 5.9 g/t AuEq and inferred resources of 418,000 ounces AuEq grading 4.6 g/t AuEq (see Skeena press release dated Sept. 17, 2018).
Phase 1 drill hole SK-18-004 is the final hole on Section 10040N, and demonstrates the strong dip continuity of the Au-Ag mineralization hosted within the 21A zone having intersected 14.02 g/t Au, 707 g/t Ag, 23.45 g/t AuEq over 28.50 metres, including a higher-grade interval associated with the contact mudstone averaging 33.19 g/t Au, 1,903 g/t Ag, 58.56 g/t AuEq over 10.50 metres. In this portion of the 21A zone, exhalative mineralization hosted within the contact mudstone occurs immediately adjacent to footwall rhyolite-hosted mineralization.
A second fence of four drill holes located on Section 10060N, also demonstrates the exceptional continuity of the mineralization hosted within the contact mudstone as well as within the rhyolite. Zone geometries on this section differ slightly in that the mudstone- and rhyolite-hosted mineralization bifurcate downdip as opposed to Section 10040N where all mineralization styles form a continuous body. Highlights of this area include SK-18-005 and SK-18-006 which intersected 22.13 g/t Au, 193 g/t Ag, 24.69 g/t AuEq over 11.90 metres and 28.97 g/t Au, 15 g/t Ag, 29.17 g/t AuEq over 12.95 metres, respectively, within the contact mudstone.
The 21A zone is currently drill defined over a large area measuring 420 m along strike, 180 m downdip with true widths ranging from one to 80 m in thickness.
Additional drill rig mobilized
To expedite the phase 1 program, a second drill rig has been mobilized to Eskay Creek and is now being utilized on the 21C zone.
21A and 21B zones -- analogous mineralization styles
The 21B zone is geologically and geochemically equivalent to the 21A zone and accounted for the bulk of mineralization historically mined at Eskay Creek. The 21B zone occurs as a tabular, stratiform, fault-bounded body characterized by well-bedded, reworked sulphides and sulphosalts interbedded with unmineralized, carbonaceous argillite (mudstone). In addition to the extremely high precious metal grades, Eskay Creek as a whole, particularly the 21A and 21B zones, is distinguished from conventional VMS (volcanogenic massive sulphide) deposits by the association with elements of the epithermal suite (antimony-mercury-plus/minus-arsenic). Elevated concentrations of Sb-Hg-As in the 21A and 21B zones are not evenly distributed throughout the zones but rather occur as isolated clusters due to later-stage localized, hydrothermal overprinting.
Although the bulk of the mined material was hosted in the contact mudstone, significant unmined mineralization exists in proximal feeder structures in the footwall rhyolites (21C and Pumphouse zones). These zones differ geochemically from the 21A and 21B zones in that they contain low levels of Sb-Hg-As as compared with those hosted in the contact mudstone.
21B zone historical reconciliation
Underground mining at Eskay Creek was performed using the drift and fill mining method with run-of-mine material either milled at site to generate a concentrate or as direct shipping ore (DSO) to smelters. Due to the elevated concentrations of Sb-Hg-As in the 21B zone, smelter penalties were often prevented via blending with slightly less deleterious material hence diluting the penalty elements while maintaining a profitable head grade. Based upon historical internal technical reports from the Eskay Creek mine, the parameters for determining reserves in 2006 were based upon a gold price of $475 (U.S.) per ounce, a silver price of $8.50 (U.S.) per ounce and a copper price of $1.50 (U.S.) per pound, which are significantly lower commodity prices than today. The determination of whether the material was milled on site versus shipped directly to an off-site smelter was based on mercury concentrations less than 200 parts per million and antimony concentrations less than 1 per cent for on-site milling and greater than 200 ppm mercury and greater than 1 per cent antimony for smelter DSO. The same 2006 mill performance report indicates metallurgical recoveries from on-site milling of the 21B zone at 84 per cent for gold and 96 per cent for silver.
Despite the substantial precious metal grades and base metal credits of the 21A zone, in the opinion of the company, the low commodity prices combined with smelter penalties and necessary cut-off grade deemed the 21A zone historically uneconomic. As well, antimony was treated as a penalty element and now has the potential to offer significant byproduct credits.
About Eskay Creek
In December, 2017, Skeena secured an option to acquire 100-per-cent interest in the Eskay Creek property. Discovered in the Golden Triangle 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.
A precious- and base-metal-rich volcanogenic massive sulphide (VMS) deposit, Eskay-style mineralization has been the focus of considerable exploration activity in the Golden Triangle dating back to 1932. Exploration programs 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 were mined with cut-off grades ranging from 12 to 15 g/t AuEq for mill ore and 30 g/t AuEq for direct shipping 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 eight mineral leases, two surface leases and several unpatented mining claims totalling 6,151 hectares.
Eskay is in the traditional territory of the Tahltan First Nation. Skeena has a positive working relationship with the Tahltan central government (TCG) and has signed exploration and communication agreements with the TCG that cover the company's other projects in Tahltan territory (see news releases dated Sept. 25, 2017, and Jan. 24, 2017).
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.
Qualified persons
Exploration activities at the Eskay Creek project are administered on site by the company's exploration managers, Colin Russell, PGeo, and Adrian Newton, PGeo. In accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects, Paul Geddes, PGeo, vice-president of exploration and resource development, is the qualified person for the company and has prepared, 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 exploration activities on its exploration projects.
Quality assurance -- quality control
Once received from the drill and processed, all drill core samples are sawn in half, labelled and bagged. The remaining drill core is subsequently securely stored on site. Numbered security tags are applied to lab shipments for chain of custody requirements. The company inserts quality control (QC) samples at regular intervals in the sample stream, including blanks and reference materials with all sample shipments to monitor laboratory performance. The QA/QC program was designed and approved by Lynda Bloom, PGeo, of Analytical Solutions Ltd., and is overseen by the company's qualified person, Mr. Geddes.
Drill core samples are submitted to ALS Geochemistry's analytical facility in North Vancouver, B.C., for preparation and analysis. The ALS facility is accredited to the ISO/IEC 17025 standard for gold assays and all analytical methods include quality control materials at set frequencies with established data acceptance criteria. The entire sample is crushed and one kilogram is pulverized. Analysis for gold is by 50-gram fire assay fusion with atomic absorption (AAS) finish with a lower limit of 0.01 part per million and upper limit of 100 ppm. Samples with gold assays greater than 100 ppm are reanalyzed using a 50 g fire assay fusion with gravimetric finish. Analysis for silver is by 50 g fire assay fusion with gravimetric finish with a lower limit of five ppm and upper limit of 10,000 ppm. Samples with silver assays greater than 10,000 ppm are reanalyzed using a gravimetric silver concentrate method. A selected number of samples are also analyzed using a 48-multielement geochemical package by a four-acid digestion, followed by inductively coupled plasma atomic emission spectroscopy (ICP-AES) and inductively coupled plasma mass spectroscopy (ICP-MS), and also for mercury using an aqua regia digest with inductively coupled plasma atomic emission spectroscopy (ICP-AES) finish. Samples with sulphur reporting greater than 10 per cent from the multielement analysis are reanalyzed for total sulphur by Leco furnace and infrared spectroscopy.
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