Skeena Resources (TSX: SKE; US-OTC: SKREF) has released an updated resource estimate for the company's Eskay Creek gold-silver project. Located in the Golden Triangle district of northwestern British Colombia, Eskay Creek is a past-producing mine first discovered in 1988 that Skeena initially optioned from Barrick Gold (TSX: ABX; NYSE: GOLD) in 2017, before acquiring 100% ownership in October of last year.
According to Skeena, the former Eskay Creek mine was once the highest-grade gold mine in the world when it was in production, as well as being the fifth-largest silver operation by volume. It produced 3.3 million oz. of gold and 160 million oz. of silver at average grades of 45 grams gold per tonne and 2,224 grams silver per tonne between 1994 and 2008.
The revised estimate for pit constrained and underground resources at Eskay Creek is 38.5 million measured and indicated tonnes grading 3.1 grams gold per tonne and 82.1 grams silver per tonne, for 3.9 million oz. gold and 101.6 million oz. silver, and 5.7 million inferred tonnes grading 1.3 grams gold per tonne and 27.4 grams silver per tonne for 231,000 oz. gold and 5 million oz. silver.
The updated resource estimate was derived from an analysis of 7,583 historical surface and underground diamond drill holes that totalled 651,332 metres, as well as the results from exploration work done by Skeena between 2018 and 2021. This recent exploration program saw 750 surface diamond drill holes completed, totalling 104,740 metres.
Skeena's president and CEO, Walter Coles, described the update as "a terrific new estimate for Eskay Creek" and said the measured and indicated resources "have increased by an astounding 186%, on a tonnage basis, since our last resource report."
Vancouver-based Skeena says that it has initiated an accelerated 2021 property scale exploration program. The program is intended to define additional near surface, bulk tonnage mineralization in order to expand the current resource base, and to supplement the company's existing mine plan. Drill testing of the near mine and regional targets is anticipated to commence in the second half of this year.
According to a preliminary economic assessment released by the company in November 2019, Skeena's Eskay Creek was envisioned as a high-grade open pit with a nine-year mine life and annual production of 306,000 oz. of gold-equivalent. Pre-production capital expenditures were pegged at $303 million. The company hopes the 2021 exploration program will allow it to advance the project to full feasibility by the end of the year.
At press time, Skeena was trading at $3.54 within a 52-week range of 90 ? and $3.95, with 217 million common shares outstanding for a market cap of $777 million.