Mexico’s proposed higher mining royalties could block nearly $7bn in investments
The Mexican government proposed raising mining royalties under the argument that metal prices have risen in recent years.
Skeena Resources has started a preliminary feasibility study (PFS) for the Eskay Creek gold-silver project within the province’s Golden Triangle area in British Columbia.
“The PFS is the next step in the evolution of Eskay Creek, as we move this high-grade, open-pit project development and through to commercial production,” Shane Williams, the company’s COO, said in a release.
As the work progresses, the company will remain focused on completing an extensive infill drilling campaign to upgrade existing inferred resources to the measured and indicated category.
Last year, the company released the results of a preliminary economic assessment, which proposed open pit producing precious metals concentrate sold to smelters
Last year, the company released the results of a preliminary economic assessment of Eskay Creek, which proposed open pit producing precious metals concentrate sold to smelters.
The mine would produce an average of 306,000 gold-equivalent oz. annually at all-in sustaining costs of $757 per oz. The associated net present value estimate, at a 5% discount rate, came in at C$638 million with a 51% internal rate of return. The mine would yield diluted head grades of 3.23 g/t gold and 78 g/t silver (4.17 g/t gold-equivalent).
Based on the PEA results, Skeena has identified additional opportunities to optimize the value of the project. These include additional work to improve the metallurgy to produce a higher-value concentrate as well as geotechnical work for pit optimization studies.
Current open-pit resources for Eskay include 12.7 million indicated tonnes at 4.3 g/t gold and 110 g/t silver for a total of 1.7 million oz. of gold and 44.7 million oz. of silver.
Additional inferred resources include 14.4 million tonnes at 2.3 g/t gold and 47 g/t silver, containing a further 1.1 million gold oz. and 21.7 million silver oz. These are estimated using a 0.7 g/t gold-equivalent cut-off. Resources in the underground classification feature 819,000 indicated tonnes grading 6.4 g/t gold and 139 g/t silver with an additional 295,000 inferred tonnes at 7.1 g/t gold and 82 g/t silver – these are derived using a 5 g/t gold-equivalent cut-off.
Skeena has retained Ausenco Engineering Canada, SRK Consulting and AGP Mining Consultants to complete the study, which is expected to be complete by next summer.
Eskay Creek produced 3.3 million oz. of gold and 160 million oz. of silver between 1994 and 2008. Skeena also holds the exploration-stage, past-producing Snip gold property.
Skeena may exercise the option to acquire a 100% interest in Eskay Creek from Barrick by December – it would need to make a C$10 million payment and put up a bond; this total amount is capped at C$17.7 million.
Once this option is exercised, Skeena would enter the permitting process – environmental studies and community consultations have started.
(This article first appeared in the Canadian Mining Journal)
