AUTHORIZED REPRINT
APRIL 11-17, 2016 / VOL. 102 ISSUE 09 / WWW.NORTHERNMINER.COM
Netolitzky returns to first
big score
BC GOLD | For $2M in exploration and 3.25 million shares,
Skeena can earn 100% of Snip from Barrick
BY LESLEY STOKES
W
[email protected]
VANCOUVER
hen Delaware Resources’ Ron
Netolitzky cracked open a rock
high in the Skeena Mountains of
northwestern B.C. in 1986, the sound of his
hammer echoed through the valley.
What he had cracked into was the Snip
gold deposit — a shear-hosted vein system
incising the mountainside and loaded with
enough high-grade gold to spark a frenzy
on Howe Street and beyond.
The deposit — first noted by Cominco
geologist Ted Muraro in 1964 — began production in 1991 under Homestake Canada,
producing 1 million oz. gold at grades of 25
grams gold per tonne and a 12-gram-gold
reserve cut-off, before low gold prices forced
the operator to shut down the operation
in 1999.
Thirty years later, Netolitzky — now
chairman of Skeena Resources (TSXV: SKE;
US-OTC: SKREF) and a recent inductee into
the Canadian Mining Hall of Fame — has
struck a deal that will blow the dust off one
of B.C.’s more intriguing pieces of historical
mining real estate.
“I’ve been chasing Snip for a lot of years,”
Netolitzky tells The Northern Miner during
a phone interview. “Any time you have a
structure where people have mined a million ounces from a million tonnes, that’s a
quality structure, and it’s certainly worth
taking another look.”
For $2 million in exploration expenses
over 30 months and 3.25 million shares
issued, Skeena can earn 100% in the Snip
property from Barrick Gold (TSX: ABX;
NYSE: ABX), which inherited the asset by
acquiring Homestake Mining in 2001. Bar-
rick would retain a 1% net smelter return
royalty on the property.
“Barrick was never part of the operation
at Snip, and to my knowledge it didn’t meet
anybody’s radar criteria in the company, so
the project has just sat there since the mine
closed,” Netolitzky says, noting the mine site
was reclaimed before the major stepped in.
Under the deal, Barrick can claw back 51%
of the property for three times the cost of
Skeena’s exploration expenses if the junior
finds in excess of 2 million oz. gold.
Walter Coles, Skeena’s president and CEO,
comments during a phone interview that
dealing with Barrick has been a “gratifying”
experience, and he is pleased the major is
now a shareholder.
“From Barrick’s perspective there’s exploration happening on a project that wouldn’t
happen otherwise,” Coles says. “They give
us a chance to go in and put cash into the
ground, and if we win, then we both win
together.”
Gold mineralization at Snip first quaked
its way into the crust sometime between 175
million and 220 million years ago, bubbling
up from large reservoirs of metal-rich porphyry systems below.
And Snip doesn’t sit in isolation. Other
standout deposits in the region that formed
during the same period include Seabridge
Gold’s (TSX: SEA) KSM project, Barrick’s
Eskay Creek mine, Teck Resources (TSX:
TCK.B; NYSE: TCK) and Copper Fox Metals’ (TSXV: CUU) Shaft Creek project and
Imperial Metals’ (TSX: III; US-OTC: IPMLF)
producing Red Chris mine — to name a
few — and discoveries are picking up speed
as infrastructure in the region improves.
Pretium Resources’ (TSX: PVG; NYSE:
PVG) Brucejack gold deposit was found by
Silver Standard Resources in 2009 with a
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Ron Netolitzky in 1988 at the Snip gold project in
northwestern British Columbia. SKEENA RESOURCES
1.5-metre discovery hole grading 16,948.5
grams gold per tonne. Proven and probable
reserves for the project — which is scheduled
for production in 2017 — now stand at 13.6
million tonnes of 15.7 grams gold for 6.9
million oz. gold.
Outside of Snip, Brucejack is the most
significant porphyry-related vein system
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outlined in a region that is otherwise dominated by world-class gold-copper porphyries.
“One advantage of Snip is its reproducibility in grades. There’s no nugget effect,”
Netolitzky says. “There’s visible gold but
it’s quite finely disseminated, so you get a
nice distribution.”
Over half of the mineralization at Snip was
mined from the Twin zone — a high-grade
blowout along an east- to southeast-striking
shear zone, divided into two by a barren
intrusive — whereas sub-parallel-trending
structures below the main deposit accounted
for the rest.
Netolitzky says the deposit runs oblique
over 1 km from surface, but in true length
it measures 300 to 400 metres along strike,
extends 500 metres true-length to depth
and is open east and down-plunge of the
historical workings.
“If we can find another high-grade ore
shoot li ke t he Tw in zone t hen, in t his
market, it would be wonderful,” he says.
“This is really brownfields exploration …
and from what I can see there’s likely a
significant amount of material left behind.
Operating guys don’t explore the same
way as us explorationists. They might’ve
thought they were being successful, but
they don’t look too far outside their mining window for opportunities.”
Coles points out that the project’s previous operators had a high hurdle for what
was considered economic.
“If we go back in history and look at what
happened, the miners had no electricity or
roads — it was a f ly-in, f ly-out, high-cost
operation” he says, noting that concentrate
was shipped from the site via hovercraft
down the Iskut River.
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“Now gold prices are four times higher than
what they were, and there’s a two-year old
hydroelectric plant with road access within
17 km from the property. So it wouldn’t take
much to connect them.”
Coles says Skeena will spend the next two
months pouring over old data and fine-tuning
an exploration strategy to get the most out
of the project’s initial $500,000 exploration
budget for the year.
“We want to be thoughtful about this, and
have a strong understanding of where the
best opportunities are on the property,” he
says. “We’re definitely eager to get in there.”
Skeena shares have traded within a 52week range of 5¢ to 12¢, and closed at 8¢ at
press time. The company has 325.4 million
shares outstanding, for a $29.4-million
market capitalization. TNM