Skeena Resources Limited Announces the Results of the Feasibility Study for the Eskay Creek Gold-Silver Project Located in the Golden Triangle of British Columbia
Skeena Resources Limited announced the results of the Feasibility Study for the Eskay Creek gold-silver project located in the Golden Triangle of British Columbia. Eskay Creek Feasibility Study The FS for Eskay Creek was completed by Ausenco Engineering Canada Inc., supported by SRK Consulting (Canada), and AGP Mining Consultants. The study confirms robust economics for a conventional open-pit mining and milling operation, with low initial capital cost intensity and a high rate of return. The FS presents a mine plan based on the same strategy first presented in the July 2021 Prefeasibility Study with an updated Mineral Resource and Reserve estimate, refined mine and mill designs supported by additional geotechnical and metallurgical data, and updated capital and operating cost estimates. The Mineral Resource and Reserve updates do not include any new drilling completed since September 2021. Eskay Creek Mineral Resource Estimate The Company's current Mineral Resource Estimate, completed by SRK, has an effective date of January 18, 2022 and forms the basis for the FS. The MRE does not include drilling results received since September 2021. Mineral Resources are reported inclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability at this time. Mining Overview The Eskay Creek Project is planned to be an open-pit operation using conventional mining equipment. The potential for an underground mining component to the Project is still being evaluated. Pit designs were developed for the north and south pit areas. The initial phases were designed for the purpose of obtaining a technical sample and necessary non-acid generating waste material to create supporting infrastructure. Open-pit mining follows down slope of the ridge where the deposit is located and there are no major pushbacks required. The north pit will consist of three main phases, while the south pit will only contain a single small phase. The FS outlines an average production profile of 431,000 AuEq ounces in the first 5 years of operation. It is anticipated that Skeena will have a stockpile developed ahead of mill start-up of approximately 600,000 tonnes of ore. Mine planning indicates that the northern end of the north pit will intersect Tom MacKay Creek, requiring the construction of a water diversion tunnel by Year 5 to route the creek flow around the open-pit before re-joining the existing creek downstream. Minimum tunnel dimensions have been selected as 4.7 metres wide by 4.7 metres high to accommodate the expected water flows. The full length of the tunnel is 1.2 kilometres. The mine schedule plans to deliver 29.9 Mt of mill feed grading 2.99 g/t gold and 78.5 g/t silver over a nine-year period. Waste tonnage from the pits totalling 225 Mt will be placed into either NAG or potentially acid generating waste destinations. The overall strip ratio is 7.5:1. Metallurgy and Processing Several metallurgical tests were conducted to further optimize the flow sheet for the FS. The goal of testing for the FS was to improve recoveries of different ore types, primarily Mudstone and Rhyolite, and to optimize the overall flowsheet. Metallurgical Optimization As part of the FS, metallurgical testing was conducted on many samples from all ore zones. A total of 57 variability samples were tested on the FS plant flowsheet to confirm its suitability and to measure the variation in Eskay Creek mineralogy and grade on plant performance. In addition, comminution (hardness), dewatering and specialized fine grinding tests were conducted by equipment suppliers to provide additional data for process design. Testing was conducted on composite samples to determine if grind size targets from the PFS could be coarsened to reduce overall grinding power requirements. Results in FS testing found that it is possible for primary and secondary grind targets to be coarsened without impacting gold recovery, allowing plant grinding equipment to be optimized. The mill-float-mill-float flowsheet, commonly used in platinum group metals processing, produced anticipated gold and silver recoveries for the samples tested across a wide range of head grades and mineral compositions as well as several composite LOM samples. Test work conducted also included variability testing of the main lithologies of Rhyolite and Mudstone. Test results indicated that reduced metallurgical performance was more often related to Mudstone material, which represents approximately 24% of the mill feed. The metallurgical performance of Mudstone samples was found to improve with changes in regrinding and flotation reagent dosages. As a result of this test program, a more robust model for gold recovery related to feed characteristics of these rock types was developed, as compared to the global recovery model developed in the PFS. Test work on blends of Rhyolite and Mudstone showed that combined recoveries could be estimated by rock type and weighting against blend fractions. Rhyolite and Mudstone material blends demonstrated gold recovery ranges from 86% to 75% across the LOM as the head grade drops from 4.5 g/t gold to 1.1 g/t gold at the end of the mine life. The weighted average gold recovery was 84.2% over LOM. The targeted final concentrate grade was 35 g/t gold. At 88.3%, average silver recovery was higher than gold recovery, which could be due to an association with galena and its favourable liberation and flotation kinetics. Individual rock type models were developed that relate silver recovery to silver feed grades. The resulting LOM silver recoveries were somewhat improved over the PFS. Concentrate Marketing Studies Multiple marketing assessments have been completed by Open Mineral AG to support the FS, which indicate that the Eskay Creek concentrate is readily saleable at a target grade of 35 g/t Au. Preliminary contract terms for the concentrate have been provided by Asian smelters, with multiple offtake alternatives available. Smelters and traders within Europe have also provided draft term sheets, and these have been identified as potential markets. The Company has been offered several preliminary term sheets for all concentrate production. These have been used as the basis for the financial model which includes gold and silver payables, industry standard treatment and refining charges, and penalties for impurities. Blending opportunities for the Eskay Creek concentrate have also been assessed as part of the FS and support improved payability. For the purposes of the FS, smelter payables average 86% for gold and 80% for silver, not including penalties of C$53 million.