Skeena Resources (SKE-V), Ron Netolitzky’s British Columbia gold developer, published an updated resource estimate Thursday morning for two deposits on its GJ property, purchased from Teck and NGEx last October.
GJ adjoins Skeena’s flagship Spectrum project in B.C.’s northwestern Golden Triangle, providing a valuable land bridge between Highway 37 and Spectrum.
The Donnelly and North Donnelly copper-gold deposits host an updated resource of 133.67 million tonnes grading 0.32% copper and 0.36 g/t gold, using a 0.2% copper cut-off, for a total of about 940 million pounds of copper and 1.56 million ounces of gold in the Measured and Indicated categories. In the Inferred category, there’s a further 312 million pounds copper and 570,000 ounces of gold at a 0.2% cut-off.
Contained pounds of copper and ounces of gold in the measured and indicated categories have increased by 12% each, compared to a 2007 estimate done by Canadian Gold Hunter Corp. Inferred pounds of copper and ounces of gold have increased by 200% and 280% respectively.
While the GJ deposits don’t generate much interest in this market of depressed metals prices, they could eventually be a great complement to a mining operation at higher-grade Spectrum, Skeena CEO Walter Coles told me in a phone interview from Toronto. Spectrum could be the higher-grade project that gets a mine going, with GJ deposits feeding the mill later on.
“Although metal prices are not favourable for development of the GJ property at this current time, we view the deposits at GJ as an inexpensive long term call option on copper and gold prices, with very low holding costs,” Coles said.
The GJ deposits are located in mountainous terrain – as is Spectrum – but the land package includes flat areas that could potentially host a mill and tailings facility, Coles said. And the GJ deposits have similar grades as Imperial Metals’ nearby Red Chris mine to the east – with exploration upside, he pointed out.
Coles said he expected Skeena’s Spectrum resource estimate – promised for the first quarter – to land within the next month or so. Skeena completed a 17,000-metre-plus summer drill program that yielded high-grade gold hits in several zones on the property as well as longer hits of 1 g/t material that suggest a porphyry system.
If Spectrum hosts high-grade pods within a gold-rich porphyry envelope, it’s a deposit that could be amenable to some type of bulk mining method, Coles said. The resource will guide a summer program that will likely include trenching.
An updated resource is also what several funds have told the CEO they are waiting for before deciding whether to invest in Skeena, which remains fairly well-capitalized after closing a $4.7-million financing in November.
“My expectation is that a resource at Spectrum opens up more doors to us in terms of capital,” Coles said.
The GJ property is vast, covering 38,374 hectares, and Skeena plans a property-wide target review to evaluate the exploration potential of other porphyrys and high-grade vein systems, Coles said.
Coles and Netolizky were in Toronto for the Canadian Mining Hall of Fame’s annual dinner and induction ceremony. Netolitzky, credited with discovering the high-grade Eskay Creek and Snip gold mines in the late 1980s, was inducted into the hall of fame last year.
Skeena has a market capitalization of about $19.5 million and working capital of about $6 million.
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