Crucial infrastructure upgrades at Golden Triangle, BC is an economic game changer

By Peter Kennedy

The Golden Triangle mining district in northwestern British Columbia, ranks among the richest gold-silver-copper belts in the world. It hosts the world’s largest undeveloped gold deposit (by reserves) – Seabridge Gold Inc.’s [SEA-TSX, SA-NYSE] KSM project, as well as many world scale projects that are moving towards production.

The region’s status as a major centre for mining and exploration has been underscored by Newmont Corp.’s [NGT-TSX, NEM-NYSE] pending acquisition of Newcrest Mining Ltd. [NCM-TSX, ASX, PNGX]. When complete, the deal will expand Newmont’s footprint in the Golden Triangle by giving the world’s leading gold producer control of the Brucejack gold mine (286,000 ounces of gold produced in fiscal 2023) as well as a 70% interest in the Red Chris mine.

Newcrest snapped up the Brucejack mine in November, 2021 by acquiring all the shares of Pretium Resources it didn’t already own for $2.8 billion USD.

Since exploration began in the Golden Triangle area prior to the 1861 Stikine Gold Rush, prospectors have been challenged by remote terrain and the need to use helicopter and air support.

But in recent years, three crucial infrastructure upgrades have improved access as well as the economics associated with development. They include the paving of the Stewart-Cassiar Hwy, the opening of port facilities for concentrate export at Stewart and the completion of a $700 million high-voltage transmission line bringing power to the region. “That’s a game changer from 20 years ago,’’ said Walter Coles, CEO of Skeena Resources Ltd. [SKE-TSX], which is focused on revitalizing the past-producing Eskay Creek mine in the Tahltan Territory of the Golden Triangle.

Seabridge is moving to add to those infrastructure improvements by building an access road from Hwy 37 (the highway that runs from Terrace to Alaska) into its KSM project, where proven and probable reserves stand at 47.3 million ounces of gold with 7.3 billion pounds of copper, plus 160 million ounces of silver.

On route to KSM, the new road is expected to intersect Treaty Creek project, which is being explored by Tudor Gold Corp. [TUD-TSXV, TUC-Frankfurt], American Creek Resources Ltd. [AMK-TSXV], Teuton Resources Corp. [TUO-TSXV].

Aside from new infrastructure, companies in the region are benefitting from retreating glacial ice and snow, sparked by climate change. The receding glaciers have opened up new economic opportunities for prospectors and mining companies looking to access and extract minerals from previously unreachable regions buried under a thick shield of ice that was thousands of years old.

Among the notable projects that are moving towards production is Ascot Resources Ltd.’s [AOT-TSXV, AOTVF-OTCQX] Premier Gold mine, which is on schedule and budget for the first gold production in the first quarter of 2024.

The Premier Gold Project is located 25 kilometres north of Stewart, B.C., adjacent to the border with Alaska. Three deposits are based on the Premier project, and the fourth is located at the Red Mountain project, located approximately 23 kilometres to the southeast of the PGP mill.

Skeena is targeting over 350,000 gold equivalent ounces in annual production at Eskay Creek. The company is also advancing the Snip mine a former high grade mine that produced approximately one million ounces of gold from 1991 to 1999.

American Creek Resources Ltd. [AMK-TSXV] is a Canadian company that offers investors unique exposure to gold and silver exploration in the richest part of the Golden Triangle area.

The company’s key asset is a 20% fully carried interest in the Treaty Creek project, a rapidly maturing gold project that already contains a very large open-pittable and underground mineral resource.

Treaty Creek is geologically located in the same hydrothermal system as Seabridge Gold Inc.’s [SEA-TSX, SA-NYSE] KSM property and Newcrest Mining Ltd.’s [NCM-TSX, ASX, PNGX] Brucejack gold mine.

KSM is one of the world’s largest undeveloped gold projects with an estimated resource of 154 million ounces of gold, 54.5 billion pounds of copper, and 819 million ounces of silver (M&I and Inf) and is targeting one million ounces of gold production annually. The company’s Chairman and CEO Rudi Fronk has recently stated his intention to bring in a partner to develop the project within the next six to nine months. The past-producing Eskay Creek mine lies just 12 kilometres further west of KSM.

The geophysics and geology at Treaty Creek indicate the potential for it to be as large as the KSM deposits, which are located on trend and just five kilometres southwest.

Exploration at the 17,913- hectare Treaty Creek is led by Ken Konkin, President and CEO of Tudor Gold Corp. [TUD-TSXV, TUC-Frankfurt], which holds a 60% interest in Treaty Creek and is the project operator. The remaining 20% is held by Teuton Resources Corp. [TUO-TSXV].

It was Konkin who lead the team that helped the bring the nearby Brucejack mine into production.

The fact that American Creek and Teuton each hold a fully carried 20% interest, means no development costs are incurred by these companies until a production decision notice is issued.  This gives shareholders a unique opportunity to avoid the dilutive effects of exploration while maintaining their full 20% exposure to an exciting development situation.

Back in March, 2023, Tudor Gold announced an updated resource estimate for the Goldstorm Deposit at Treaty Creek. The new estimate pegs the indicated resource at 23.37 million ounces of gold equivalent (AuEq) within 641.93 million tonnes at a grade of 1.13 g/t AuEq. On top of that is an inferred resource of 7.35 million ounces of AuEq within 233.9 million tonnes at a grade of 0.98 g/t AuEq (24.28 Moz Au, 157.5 Moz Ag, 3.0 B Lbs Cu Ind & Inf).

However, drill results are indicating the potential for significant expansion of the Goldstorm deposit, which measures over a strike length of 2,200 metres, a width of 1,1200m and has been traced vertically to a depth of 1,300 metres. The deposit remains– open in all directions and depth.

Tudor Gold is expected to complete about 30,000 metres of drilling at Treaty Creek in 2023, likely spending approximately $16 million this year.

To date, Tudor Gold has completed most of the drilling planned for its 2023 program within areas encompassing the Goldstorm Deposit and Perfectstorm Zone, which is located about 1.5 kilometres to the south Goldstorm.

The second batch of drill results was reported in a press release on August 16, 2023. The five holes reported in the release are located in the northeastern area of the Goldstorm Deposit.

Drilling highlights include hole GS-23-170, which returned 1.48 g/t AuEq over 210 metres within a 516-metre intersection grading 1.19 g/t AuEq located 150m outside of the Goldstorm deposit mineral resource area.

Konkin said the latest results confirm the continued expansion of the Goldstorm Deposit to the northeast. He said results from the company’s northeast-most step-out drilling will certainly expand the volume of the deposit with AuEq values well above the 0.7 g/t AuEq underground resource estimate cut-off grade used for the deposit.

“In my mind, this is definitely a mineable project,’’ said Konkin. “Going forward it is just a question of de-risking the thing.’’

Tudor has said its immediate goal is to increase the size of the resource without diminishing the grade. An updated resources estimate based on Goldstorm drilling will be a critical component of the preliminary economic assessment (PEA) that exploration crews plan to complete once they have defined the Goldstorm deposit.

It is possible that Tudor may proceed with the PEA before completely defining the Goldstorm deposit.

People can be understandably concerned about logistics in northern British Columbia, but this project has exceptional logistics,’’ an American Creek spokesman said. An access road is currently being constructed that could potentially connect Treaty Creek in the near future to Highway 37, which runs from Terrace to Alaska. “Power can also be taken off the Northwest Transmission Line (which runs along Hwy 37),” he said. “This is hydro power, and among the cheapest in the world.’’

The quality of the Goldstorm Deposit is evident when using a 1.0 g/t AuEq cut-off which measures 15.19 million ounces of gold within 319.2 million tonnes at a grade of 1.48 g/t AuEq in the indicated resource category and another 3.86 million ounces of gold within the inferred resource of 84.2 million tonnes of grade 1.43 g/t AuEq.

Goldstorm has been categorized into three dominant mineral domains and several smaller mineral domains with unique geological features. The CS-600 has an indicated resource of 9.86 million ounces AuEq, grading 1.10 g/t AuEq, and an inferred resource of 3.71 million ounces grading 1.19 g/t AuEq.

Crews have begun construction of drill pads required to pursue the northern aspects of the CS-600, 300H and DS5 domains for the 2024 drill program. These are beyond the scope and time available to drill within the company’s planned 2023 program. Defining the shape and extent of each domain is necessary prior to determining the mine plan, which is essential for the PEA level and beyond.

In early September 2023, American Creek shares were trading at 12.5 cents in a 52-week range of 21 cents and 11.5 cents, leaving the junior with a market cap of just under $50 million based on 442.8 million shares outstanding.

THIS IS NOT A RECOMMENDATION TO BUY OR SELL ANY SECURITY.