Heritage eyes Eskay look-a-like

Vancouver — In 1988, junior company Calpine Resources sparked an exploration frenzy in northern British Columbia by discovering the exotic Eskay Creek gold-rich massive sulphide deposit. Today, another small company is employing computer modeling in hopes that lightning will strike twice in the Iskut-Sulphurets gold camp, just north of Stewart.

Heritage Explorations (HXL-V), formerly Heritage American Resource, is preparing for a 4,000-metre drill program over its 473-sq.-km land package around Barrick Gold‘s (ABX-T) high-grade gold-silver mine. The junior will test conceptual targets defined by Australian-based Geoinformatics Exploration, formerly Fractal Graphics. The Aussie company used all available data from the region to develop a three-dimensional model to define drill targets. The effort led to the identification of nine areas, which exhibit similarities to the areas of mineralization at Eskay Creek.

With two of the prospective zones lying on joint-ventured ground, Heritage inked a deal to earn the remaining half-interest it does not already own in the Sib and Megan claims. Under the deal, Heritage must pay Uniterre Resources (unt-v) $50,000 on signing and $300,000 before the end of October. Another $400,000 is due over the next two years in two equal instalments. Uniterre retains a 2% net smelter return royalty over the claims.

The 3.4-sq.-km Sib claims are adjacent to, and along strike of, the Eskay Creek operation. Exploration work between 1988 and 1991 defined a 1,680-metre strike-length portion of the favourable mudstone contact horizon, which hosts the Eskay Creek mine mineralization.

In 1990, twenty-six diamond drill holes, totaling 4,000 metres, tested selective geophysical and mineralized stratigraphic zones along the length of the Sib claims. One of the holes returned 14.3 metres grading 13.1 grams gold and 961.1 grams silver per tonne. Dubbed Lulu, the new discovery was followed up by an additional 1,680 metres, with four holes intersecting massive barite with high gold and silver values and 25 holes cutting gold-silver-bearing stockworks.

The Sib claims will be the focus of the junior’s proposed drill program.

Some 4 km southeast of the Sib claims, the junior also holds the Polo property, where, in 1990 and 1991, chip, stream-sediment and geochemical samples were collected. Grab samples returned up to 3.4 grams gold and 78.1 grams silver per tonne.

The Skookum claims, another piece of ground held by the company, are 3 km north and northwest of the Eskay Creek mine. To date, only limited first-pass exploration has been carried out.

In August, Heritage acquired the bulk of its Eskay Creek ground by purchasing all the shares of privately owned Glenfred Holdings. Glenfred’s main asset was a 430-sq.-km land parcel in the area. Under the deal, the junior issued 3.7 million escrow shares to St Andrew Goldfields (SAS-T), 2.8 million shares to Zebrex Holdings, and 925,000 shares to Dolly Varden Resources (DLV-V). The shares will be released in amounts of 15% each at 6-month intervals starting Jan. 19, 2003. Insiders W.F. Christensen and Glenn Laing were each granted 368,500 options in Heritage at an exercise price of 12.2 per share. Laing is Heritage’s chief executive officer.

Under the deal, Heritage picked up the prospective Bonsai and Treaty Creek properties. Situated only 6 km from the Eskay Creek mine, the Bonsai property hosts a geochemically anomalous zone of gold-arsenic mineralization. Moving 20 km east of the mine, the Treaty Creek property hosts 10 mineralized zones.

Eskay Creek has a long history of exploration dating back to 1932 when T.S. Mackay first discovered mineralization in the area. Early work identified more than 30 mineralized zones in the upper Coulter and Eskay Creeks along a line of gossanous bluffs that extends for more than 7 km. The initial targets were at the Mackay adit of the yet-to-be-discovered 21 zone, some 9 km to the southwest. Over the years, surface work included several thousand metres of diamond drilling, numerous trenches, pits and open cuts.

In 1971, a 1.5-tonne sample of high-grade ore was extracted from trenches on the 22 zone, which lies 2 km southwest of the 21 zone, and by 1979, these trenches were mined to produce 8.75 tonnes of hand-cobbed ore. Finally, in 1989, the first real significant mineralization was hit when Murray Pezim-led Calpine cut 208 metres grading 27.2 grams gold and 30.2 grams silver in hole 109.

The rest, as they say, is history. Eskay Creek went into production in 1994 with the ore so high grade (greater than 3 oz. gold-equivalent per tonne) that it was simply mined, crushed and shipped directly to smelters with no milling or concentrating. A mill was only established in 1998, and even today, more than half of the production is directly shipped. In 2001, the underground operation produced 320,784 oz. gold and 15.5 million oz. silver at a total cash cost of US$49 per oz. gold. For 2002, Barrick expects the mine to add 366,000 oz. gold and 16 million oz. silver to its global output.

The bulk of the initial reserves were defined in the 21B zone, which is hosted in Middle Jurassic volcanic and sedimentary rocks. The zone forms a lens-shaped body measuring 900 by 300 by 20 metres. The mineralization occurs as a stratabound sheet within carbonaceous mudstones of the contact unit and in feeder veins in the underlying rhyolite breccia.

Mineralization consists of sphalerite, tetrahedrite, lead-sulfosalts with lesser galena, pyrite and arsenopyrite. Stibnite and sometimes cinnabar locally overprint the deposit. Lateral and vertical zoning is observed with antimony, arsenic and mercury-rich mineral assemblages observed in the south, and zinc, lead and copper-rich assemblages in the north.

Based on mineral associations and continuity of grade, the 21 zone has been divided into two deposits: the 21A (formerly called the South zone) and the 21B (which includes the former Central and North zones). These deposits are separated by 140 metres of weak mineralization. Diamond drilling has traced the entire zone for 1.4 km along strike, 250 metres downdip over widths of 5-45 metres

The exploration success did not stop at startup. In 1995, the NEX and Hangingwall zones were intersected by drilling. The NEX zone lies north of the 21B lens, at the same stratigraphic horizon, and consists of mainly massive sphalerite, tetrahedrite, galena and lesser lead-sulfosalts, with late chalcopyrite stringers crosscutting the lens. The Hanging Wall zone is stratigraphically above the NEX zone, usually above the first basaltic sill, and is dominated by pyrite, sphalerite, galena and chalcopyrite.

Feeders

The underlying rhyolite unit hosts vein systems that are believed to be feeders for the stratiform mineralization. The stockwork vein and disseminated sulphides are most noticeable in the 109, 21C and Pumphouse zones.

The entire host sequence comprises a succession of andesite, marine sedimentary rocks, intermediate-to-felsic volcaniclastic rocks, rhyolite, mudstone (which hosts stratiform mineralization), and basaltic sills and flows (which are intercalated with turbiditic mudstones). The sequence is capped by a thick accumulation of clastic rocks, which fill the Bowser Basin.

The mine stratigraphy is folded into a north-northeast-trending upright open fold, plunging gently to the north. Stratiform mineralized lenses occur on the western limb of the fold, near the fold closure, and generally dip 30-45 to the west. Northwest-trending faults, as well as north-to-northeast axial planar faults, cut the sequence. Metamorphic grade in the area is lower greenschist facies.

Eskay Creek-style mineralization is unusual in that there is a close association between low-temperature epithermal gold-silver and volcanogenic massive sulphide deposit types. The epithermal mineralization is characterized by gold, silver, arsenic, antimony and mercury mineral suites and forms massive and stratabound lodes, as well as more usual crosscutting veins and disseminations. The massive sulphide mineralization shows typical ore textures but atypical mineralogy and significant precious metal enrichment.

Based on the complex nature of the genesis, Eskay Creek is now classified as a shallow subaqueous hot-springs deposit, an important new class of submarine mineral deposits that has only recently been recognized in modern geological environments. The deposit type is defined as a transitional one between sub-aerial hot-spring gold-silver deposits and deeper water, volcanogenic massive sulphide exhalites (Kuroko or Besshi types).

In May of last year, Heritage completed a 1-for-4 share consolidation. Currently, it has only 5.5 million shares outstanding, or 7.9 million fully diluted. The Oakville, Ont.-based company is tightly held, with St Andrews and Zebrex each holding a 28.4% stake.

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