posted with permission of Visual Capitalist | July 7, 2016
In a hidden corner of northwestern Canada lies some of the world’s most significant mineral potential. Billions of dollars of undiscovered gold, silver and copper still sit within an unexplored area that was once remote. However, only now can these world-class deposits be finally tapped. Skeena Resources TSXV:SKE has helped Visual Capitalist to put together the story of the famed Golden Triangle.
Even before Canada was officially a country, the area now known as the Golden Triangle was a hub for prospectors looking to strike it rich.
In 1861, Alexander “Buck” Choquette struck gold at the confluence of the Stikine and Anuk rivers, kickstarting the Stikine Gold Rush. More than 800 prospectors left Victoria to go to the Stikine in search of gold.
A few short years later, an even more significant rush would occur just to the north in the Cassiar region—it’s where British Columbia’s biggest ever gold nugget, weighing in at 73 ounces, would be found. The Atlin Gold Rush, an offshoot of the world-famous Klondike Gold Rush, would also occur just north of the Triangle.
The first discoveries
The companies that first worked in the Golden Triangle balanced its richness against the costs of its remote location.
Premier gold mine
The first big discovery in the Golden Triangle was at the Premier gold mine, which started operations in 1918. The company that first owned it, Premier Gold Mining Company, returned as much as 200% on the stock market between 1921 and 1923. At the time the Christian Science Monitor called it “one of the greatest silver and gold mines in the world.”
Discovered in 1964 by Cominco, the deposit stayed dormant until 1986, when it was drilled in a joint venture with Delaware Resources. Murray Pezim’s Prime Resources bought out Delaware after the stock ran from a dollar to $28 a share.
The high-grade Snip mine produced approximately one million ounces of gold from 1991 until 1999 at an average gold grade of 27.5 gams per tonne.
In 1988, after 109 drill holes, tiny exploration companies Stikine Resources and Calpine Resources finally hit the hole they needed at Eskay Creek with grades as high as 27.2 g/t and 30.2 g/t gold.
Eskay would go on to become Canada’s highest-grade gold mine and the world’s fifth-largest silver producer, with production well in excess of three million ounces of gold and 160 million ounces of silver.
- Gold: 49 g/t
- Silver: 2,406 g/t
- Lead: 3.2%
- Zinc: 5.2%
By the time all was said and done, the stock price of Stikine Resources would go from $1 to $67, after it was bought by International Corona.
Why did these three rich mines shut down?
Despite the gold in the Triangle being extremely high grade, lower gold prices in the late ’90s made the economics challenging. Meanwhile, the lack of infrastructure in this remote area meant that power, labour and logistics costs were sky high.
Both of these things have changed today, and activity at the Golden Triangle is now fast and furious.
Gaining access to the Triangle
The Golden Triangle is a hot area for exploration again. This is for three main reasons: higher gold prices, new infrastructure and modern discoveries.
Higher gold prices
Average gold price (1999): $279 (adjusted for inflation: $398)
Average gold price (2016): $1,202
Gold prices are more than three times as high today, even after adjusting for inflation. Combined with the Golden Triangle’s high grades, this becomes even more attractive.
Today, road access to the area is easier than ever and a new transmission line will dramatically reduce the cost of power for companies operating in the Triangle.
- Completion of a $700-million high-voltage transmission line to the Golden Triangle. The Northwest Transmission Line goes 335 kilometres from Terrace to Bob Quinn Lake and north to the Red Chris mine
- Paving of the Stewart-Cassiar highway north from Smithers (Highway 37)
- Opening of ocean port facilities for export of concentrate in Stewart
- Completion of a three-dam, 277 MW hydroelectric facility located 70 kilometres northwest of Stewart
The next gold rush at the Golden Triangle has already started. Just some of the new discoveries in the area include Seabridge Gold’s (TSX:SEA) KSM project, Pretium Resources’ (TSX:PVG) Valley of the Kings deposit and Imperial Metals’ (TSX:III) Red Chris mine.
Yet despite this track record of new discoveries and mines being built in the area, a B.C. government report estimates that only 0.0006% of the Golden Triangle has been mined to date.
Posted with permission of Visual Capitalist.