A junior exploration company hopes to revitalize what was once a flagship of the BC mining industry, the Eskay Creek gold mine.
Skeena Resources announced Dec. 18 it has acquired 100 per cent interest in the property. This marks Skeena’s second property acquired from Barrick Gold Corporation, strengthening their foothold in the Golden Triangle, the company’s primary focus. The Eskay Creek property produced 3.3-million ounces of gold and 160-million ounces of silver from 1994 until its closure in 2008.
Skeena’s CEO Walter Coles Jr. said site enhancements and provincial infrastructure investments, such as the Hwy. 37 Transmission Line, have created an ideal climate for smaller, nimbler companies to move into the places where industry giants have moved out.
“I get a little frustrated sometimes talking with investors and other companies who get so excited with the Yukon, but the Yukon doesn’t nearly have the infrastructure that British Columbia has,” Coles said. “It’s tremendous. We’re evaluating these projects on the belief that, due to the infrastructure, the cost of putting a mine into production is going to be lower. Plus we have a higher gold price today.”
Cole doesn’t expect the output Eskay once produced, then Canada’s highest-grade gold mine, but is betting on multiple properties to generate upwards of 100,000 ounces per year.
Skeena is currently reviewing historic exploration and production data to build upon previous geological understanding of the property, and will then develop an upgraded geological model.
The deal with Barrick was struck over a $10 million purchase price, payable once the required $3.5 million in exploration expenditures is met. Skeena will also reimburse reclamation costs to Barrick, who will retain a back-in right to purchase 51 per cent of the property with conditions.
As part of the deal, Skeena announced Dec. 22 it had closed a strategic investment with Barrick of $1 million for 1,250,000 flow-through shares valued at 80 cents each. The proceeds will be used for Canadian exploration expenses.
It’s still too early for Skeena to commit to any employment projections, but the company expects the numbers to be on par with its nearby Snip property, currently employing between 30 and 40 workers during the drilling phase.