Skeena Resources (TSX:SKE) Updates Mineral Resource Estimate for Snip Gold Project, Incorporating New Data and Methodologies

Snip Mine. Source: Skeena Resources

Skeena Resources (TSX:SKE) has issued an updated Mineral Resource Estimate (MRE) for its wholly-owned Snip Gold Project, situated in British Columbia’s Golden Triangle, as of September 5, 2023. This revision includes additional data from 307 drill holes covering 46,268 meters. These new figures come with improvements in geological interpretation, resource estimation methods, long hole mining parameters, and updated metallurgical recovery rates.

Randy Reichert, Skeena’s President & CEO, commented in a press release: “With the successful conversion of over 570,000 gold ounces to the Indicated category, we are very pleased with the updated Mineral Resource Estimate for Snip. This Resource will form the basis of a detailed engineering study with project economics, which we anticipate being released in H1 2024. The study will demonstrate the potential benefits of adding Snip mineralization to the Eskay Creek Project as a satellite operation, likely including an increased mine life and improved concentrate payabilities at Eskay Creek. We look forward to continuing to unlock value for all stakeholders as we advance the Project.”

During 2021 and 2022, Skeena Resources Limited and its former partner, Hochschild Mining, conducted infill drilling programs. Skeena completed 238 drill holes covering 35,891 meters, and Hochschild completed 69 drill holes totalling 10,377 meters. These drilling efforts led to the identification of new zones of mineralization, expansion of existing veins, confirmation of vein continuity, and increased confidence in variogram range. The programs also explored areas that Skeena had not previously tested to validate historical assays and consider potential classification upgrades.

In the MRE from 2020, a 40-meter omnidirectional 3-D buffer had been placed around drill holes conducted by Skeena between 2016 and 2019. This buffer was established due to the presence of quality assurance and quality control (QAQC) data in these recent drill holes, which was absent in historical assays. Consequently, this led to the downgrade of certain Indicated Resources to Inferred Resources. However, the 2021 and 2022 drilling programs included 28 twin drill holes totaling 3,318 meters to validate historical data. These new findings have enabled the use of historical drill hole data in the updated grade estimation process without further constraints.

Changes have also been made in the density values used in the model. In 2020, two density values were utilized: 2.78 g/cm3 for vein mineralization and 2.86 g/cm3 for the Biotite Spotted Unit (BSU). The 2023 MRE incorporates 1,770 additional specific gravity measurements and has updated the values to 2.91 g/cm3 for vein mineralization and 2.84 g/cm3 for the BSU.

The 2023 MRE update has also switched from using a single-search ellipsoid of the variogram to dynamic anisotropy for estimating larger veins. This new approach allows for adjustments to the search ellipse on a block-by-block basis, thereby leading to more accurate local estimates that better align with original vein model interpretations.

Skeena Resources Limited has announced plans to release a comprehensive engineering study covering project economics for the Snip Gold Project in the first half of 2024. This forthcoming study is expected to consider Snip as a potential satellite operation that would supply a centralized mill at Eskay Creek. The company anticipates that the added high-grade mineralization from Snip could extend the operational life at Eskay Creek while possibly reducing smelter penalties.

Highlights from the update are as follows:

  • Updated MRE of 823,000 ounces grading 9.35 g/t Au in the Indicated category and 114,000 ounces grading 7.10 g/t Au in the Inferred category
  • An increase of 579,000 Au ounces in the Indicated Resource, representing a growth of 237% since the 2020 MRE
  • 2021 and 2022 drilling programs heightened confidence of historical drilling data and improved certainty in continuity of the ore body
  • Metallurgical recovery increased to 96% from 90%

Table 1: 2023 Indicated and Inferred Underground Resource Reported in Veins Contained Within Long Hole Stope Optimized Shapes Created at a 2.5 g/t Au Cut-off Grade

Category Domain Tonnes
(‘000)
Contained Grade
Au (g/t)
Contained Ounces
Au (‘000)
Indicated Main – V 850 9.59 262
Main – S 1,718 9.28 513
Twin West 171 8.69 48
Total Indicated 2,739 9.35 823
Inferred Main – V 115 7.38 27
Main – S 323 6.22 65
Twin West 61 11.02 22
Total Inferred 499 7.10 114

Table 2: 2020 vs 2023 Resource Comparison

2023 Snip Resource
Category Tonnes

(000)

Contained Grade

Au (g/t)

Contained Ounces

Au (000)

Total Indicated 2,739 9.35 823
Total Inferred 499 7.10 114
2020 Snip Resource
Category Tonnes

(000)

Contained Grade

Au (g/t)

Contained Ounces

Au (000)

Total Indicated 539 14 244
Total Inferred 942 13.3 402
2020 vs 2023 Resource Comparison
Category Tonnes

(000)

Contained Grade

Au (g/t)

Contained Ounces

Au (000)

Total Indicated 408% -33% 237%
Total Inferred -47% -47% -72%

Table 3: Underground Scenario Assumptions for Determining Cut-off Grades With Reasonable Prospects of Eventual Economic Extraction Assuming Long Hole Mining Method

Input Parameters Value Unit
Gold Price 1,700 US Dollars per Ounce
Exchange Rate 1.3 CAD:USD
Metallurgical Recovery 96 Percent
Royalty 1 Percent
Selling Cost 18.50 CAD Dollars per Ounce
Mining Cost 115 CAD Dollars per Tonne
Process Cost 29 CAD Dollars per Tonne
G&A Cost 17 CAD Dollars per Tonne
All-in Cost 161 CAD Dollars per Tonne
Mining Method N/A Longhole: 10 m H x 5 m L x 2 m W

Dip: 55 – 90 degrees

1 m offset to UG workings

Cut-off Grade 2.5 Grams per tonne (g/t)

Table 4: Reminder of Near-Term Value-Generating Catalysts for Skeena

Catalyst Expected Completion Date
Updated Mineral Resource Estimate for Eskay Creek Completed Q2 2023
Increased Land Package Surrounding Eskay Creek Completed Q3 2023
Updated Mineral Resource Estimate for Snip Completed Q3 2023
Metallurgical Optimization & Simplified Flowsheet at Eskay Creek Expected Q3 2023
Exploration Results from Eskay Creek Expected Q3/Q4 2023
Definitive Feasibility Study for Eskay Creek Expected Q4 2023
Maiden Engineering Study for Snip Expected H1 2024

 

 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.

Matthew Evanoff

I specialize in the mining industry, focusing on top global mining stocks. My reporting covers the latest industry news, company/project developments, and profiles of key players. With a degree in finance and economics from the University of Toronto, I've contributed to a wide range of industry publications. Beyond my professional pursuits, I have a keen interest in global business and a love for travel.

By Matthew Evanoff

I specialize in the mining industry, focusing on top global mining stocks. My reporting covers the latest industry news, company/project developments, and profiles of key players. With a degree in finance and economics from the University of Toronto, I've contributed to a wide range of industry publications. Beyond my professional pursuits, I have a keen interest in global business and a love for travel.

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