Netolitzky’s Skeena seeks high grade at GJ

VANCOUVER — It’s taken NGEx Resources (TSX: NGQ; US-OTC: NGQRF) over three decades to bid farewell to its GJ porphyry copper-gold property, 60 km south of Dease Lake, B.C., but now the Chilean-focused explorer, along with majority partner Teck Resources (TSX: TCK.B; NYSE: TCK), is selling it all to the high-grade gold hunter Skeena Resources (TSXV: SKE; US-OTC: SKREF).

“The GJ property is something that I’ve been after for a lot of years and always said that one day I’ll get back up there,” famed explorer and Skeena chairman Ron Netolitzky tells The Northern Miner from his home in Victoria. “It’s something that’s worth chasing in the whole district.” 

The company picked up GJ from Teck and NGEx for $500,000 cash-in-hand and $1-million worth of Skeena shares, with more share payments totalling $3 million on or before the second and fifth anniversary.

For Netolitzky, the deal was a “bargain,” considering the property lies 25 km northeast on trend of Imperial Metals’ (TSX: III; US-OTC: IPMLF) behemoth Red Chris copper-gold mine, and that Teck “spent a lot of money getting ready to do the job, but never actually did it.” 

“I think Teck started on GJ with a concept of looking for a deep Red Chris, but if you looked at the money they spent, they did a heck of a lot of geophysics, but not a whole lot of drilling,” he says. 

MINFILE data from B.C.’s Ministry of Energy and Mines indicate that Teck ran 50 line km of ground magnetic survey, 76.6 line km of induced polarization survey and only 4,300 metres of drilling during its joint venture with NGEx, which earned the major a 51% interest in the property in 2014.

Netolitzky says despite Teck’s $12-million investment, the GJ deposit remains “largely untested.”

“It’s similar to Red Chris, and worthy of a follow-up,” he says. “It has a of the same signatures, and it remains open to depth.”

Since 1964, Netolitzky and other explorers outlined a large porphyry system at GJ, highlighted by drill intercepts of 47 metres grading 0.8% copper and 1.3 grams gold per tonne, within a broader intercept of 131 metres that graded 0.4% copper and 0.65 gram gold.  

Over the years, the property exchanged hands until Curator Resources emerged as a sole owner in 1983, before changing names to Canadian Gold Hunter (CGH), now NGEx, in 2003. 

The following year, the rebranded CGH pulled up its bootstraps and hit the GJ ground hard, which led to the project’s maiden resource of 153.3 million tonnes grading 0.3% copper and 0.37 gram gold, using a 0.2% copper cut-off in 2008. 

Netolitzky says the company intends to update the resource to include Teck’s drilling by year-end, but he emphasizes that he’s not here to “promote porphyry coppers.” 

“The previous explorers didn’t focus on what I like to look at — which is around the edges of a porphyry system,” he says. “And that’s where I like to think there’s a great shot at finding a high-grade gold deposit.”

Netolitzky says that when he was prospecting the region in the late 1980s, he was finding high-grade gold veins in the neighbouring hills, but everyone was too focused on porphyries to care.  

This sentiment changed, he adds, when a drill hole intersected 16,949 grams gold per tonne over 1.5 metres at the high-grade Brucejack gold deposit by Pretium Resources (TSX: PVG; NYSE: PVG) in 2009. 

Seabridge Gold’s (TSX: SEA; NYSE: SA) adjacent KSM mega-porphyry deposits are strong candidates for the engine behind Brucejack’s metal-rich epithermal veins, Netolitzky says — where gold may have leaked from the mineralized porphyry chambers through the crust. 

“If you have a large mineralizing system like that you better pay attention to it, and make sure you understand the opportunity that you may find on its periphery. It worked for Brucejack,” he says.

Aside from diversifying Skeena’s project portfolio, acquiring GJ also de-risks the company’s adjacent Spectrum property by giving it some “room to breath.”

“Spectrum has what I call ‘topographic challenges,’” he says. “But GJ allows us access all the way to highway 37 and to new 287 kV power lines in the region. It’s excellent country to put infrastructure in, so it gives us an area for growth.”

The Vancouver-based explorer has high aspirations for its high-grade, mesothermal gold Spectrum deposit, located in the heart of B.C.’s most prospective metal district. 

Since July Skeena has smashed out an 18,000-metre drill program, with the ambition to add a high-grade gold resource to the books by early next year. 

Michael Cathro, vice-president of operations for Skeena, says the drill program is designed to step out along a non-compliant National Instrument 43-101 resource of 614,000 tonnes grading 12.3 grams gold at a 5 gram gold cut-off for 243,000 oz. gold, over a strike length of 600 metres and 150 metres.

“We’re now down to 300 to 400 metres below surface, and it’s looking really good,” he says during a phone interview. “We’re getting lots of high-grade gold hits — many narrow — but to the south we’re also seeing quite broad, low-grade gold that suggests there’s a porphyry system forming.”

Recent assays have returned 14 metres of 7.82 grams gold, including 2 metres of 35 grams gold and 11.4 metres grading 16.7 grams gold, and a 2-metre interval of 81.8 grams gold. Porphyry intercepts returned 224.5 metres of 0.6 gram gold, with 0.2% copper and 5.13 gram silver within 5.5 metres from surface. 

Although the broad and high-grade mineralization intervals at the southern end of the resource drilling are “wide open,” Cathro says they’re not seeing the same “spectacular grades” in the north. 

“The drilling we’ve done underneath the central zone to the north seems to suggest it pinches out a little, but we think it shifts over a couple hundred metres to the east in another parallel zone, which we call Boundary,” Cathro says. “I don’t think the north end is closed off, but we hopped over to Boundary because there are some really high gold numbers in outcrop and soil at surface.”

Walt Coles Jr., president and CEO of Skeena, says that although only half of the assays for the program have been received, he’s pleased with the results so far, and looks forward to advancing the project.

“We’ve added a lot of geotech holes to the program in anticipation of putting an adit in by the end of next year, so our workers have been up against the wall trying to get that done,” he says. “But the adit would allow us to drill year-round, which makes the extra effort worth it.”

Both properties will lay dormant during the winter months while the team strategizes the plan of attack for next year’s drilling programs, and possibly even score new acquisitions.

“The one certainty in the commodities market is that they’re cyclical, and while copper may come down, it’ll eventually go in the other direction,” Coles says. “So our intention is to buy property in B.C., and although we’re focused on high-grade gold deposits, we’r
e still opportunistic.”

Skeena has traded within a 52-week range of 5¢ to 12¢, and closed at 7.5¢ at press time. It has 264.3 million shares outstanding, for a $19.8-million market capitalization.