What would you say if I told you that the greatest sunken ship treasure discovery in the world had the potential to take place, but the expedition was still in its planning stages, and that if you wanted to invest even a small amount in order to help finance the company’s operations, you could possibly multiply your investment by three, four, ten or even twenty times once the treasure was found? Would you want to know more? Chances are you would say, “Yes.”
I then tell you that this previously unexplored location is surrounded by a hotbed of sunken ships that had already been excavated and had proven to contain huge stores of treasures, sending initial investments skyrocketing.
I also tell you that this particular location has lagged behind in production, simply because the potential required operations had not yet taken place.
However, judging by what has already been found and initial prodding, it looks like the area could prove to be a ‘gold mine’ producing treasures in abundance of high quality and differing statures, each valuable in their own right. Now you are really interested...
And now that I have your attention with this theoretical vision, let’s turn to the Golden Triangle region in Northwestern British Columbia which contains some of the most important deposits of gold in Canada's history. This region has played a major role in Canada's mining industry for decades, attracting prospectors and companies from around the world.[1]
I have personally visited the Golden Triangle area, and I have to say that I was greatly impressed. Apart from the stunning outward beauty of the area, the riches that are purported to be in the ground could eclipse the glow of what you can see above the mines.
The area itself encompasses a 500 km belt of mineralization that runs from Atlin in northern British Columbia near the border with the Yukon, to Kitsault just southeast of Stewart, British Columbia. This region has been historically associated with molybdenum and silver production.[2]
The name Golden Triangle comes from the southern portion of the belt due to its propensity for holding many past producing mines, with several more in various stages of production. The geology contains a wide variety of mineral deposits — not only gold and silver, but also base metals such as copper and molybdenum.[3]
The area was being mined before Canada became a country, the first known ‘gold rush’ taking place in 1861 when Alexander “Buck” Choquette, a young adventurer from Quebec, struck gold near the Stikine and Anuk Rivers, setting off the Stikine Gold Rush 6 years before Canadian Confederation.[4]
In 1874, a more significant rush called ‘The Cassiar Gold Rush’ occurred, producing British Columbia’s biggest gold nugget ever. The nugget sourced from McDame Creek by prospector Alfred Freeman on the Discovery Company’s claim weighed in at a respectable 73 ounces. At today’s gold price of approximately US$1,875/ounce (Kitco: June 2, 2022), that is a hefty amount of close to $137,000. Not bad for a day full of fun work. I’m pretty sure there were some happy people that day![5]
Fast-forward to 2018 and the Golden Triangle is at 11% of Canada’s total gold production with a mining figure of 20,235 kilograms. While the number may not seem that impressive compared to Ontario’s 42% or Quebec’s 34% of countrywide production,[6] it should be taken into account that up until now the region has been lagging behind — in part because of the fact that the vast majority of resources have not been tapped. It is thought that there are billions of dollars of gold, silver and copper still to be unearthed.
So if the area is purported to be so resource-rich, why has production not been as rapid as it could be?
There is a big reason for that. In real estate, we know it is all about location, and following that, the amenities that make the location a viable one for taking optimal advantage of the resources available.
As far as location, the Golden Triangle has that one covered. It is situated within the Sulphurets Hydrothermal System, which hosts one of the world’s largest concentrations of minerals:
Unfortunately, this prime location has also caused problems. As far as amenities, the fact that the area is remote was a major issue for decades. That, in itself, would not pose a big problem as long as there was an existing infrastructure to maximize access for road and port development as well as electricity. Up until recently, this was at an insufficient level to allow for proper development of the area.[8]
However, this has changed with the paving of the Stewart-Cassiar highway (Highway 37) north from Smithers, BC and the completion of a $700 million high-voltage transmission 335km line that runs from Terrace to Bob Quinn Lake and north to the Red Chris mine. In addition, there has also been an opening of ocean port facilities for export of concentrate in Stewart and the completion of a three dam, 277 MW hydroelectric facility located 70km northwest of Stewart.[9]
With these elements in place, the infrastructure is now one that is fully capable of handling higher volume, advancing exploration of the area.
Just to get an idea of the enormous production capabilities of the Golden Triangle area, take a look at one company’s numbers, Seabridge Gold. In December 2020, estimates of the total Measured, Indicated and Inferred resources ran at 194.06 million ounces. And that is just one company.[10]
Including Seabridge, there are a few companies that I would like to mention here — ones that in my opinion have what it takes to take full advantage of the area.
Seabridge Gold (NYSE: SA / TSX: SEA)
Along with several other projects, Seabridge Gold has as a subsidiary, the KSM project. This is considered to hold the world’s largest undeveloped copper/gold porphyry deposit, with reserves of 38.8 million ounces of gold and 10.2 billion pounds of copper.[11]
In February 2022, Seabridge announced that they had agreed to the sale of a secured note, to be exchanged at maturity for a silver royalty for US$225 million to Sprott Resource Streaming and Royalty Corp and Ontario Teachers Pension Plan. The proceeds will be used to continue ongoing physical works at KSM. They have also signed an agreement with BC Hydro to supply green, low-cost construction power to the project.[12]
With these latest developments, Seabridge has the location, amenities and finances covered. Sounds like this could really be a golden situation to me.
SKEENA RESOURCES (NYSE: SKE / TSX: SKE / FRA: RXF)
In 2020, Skeena renegotiated an agreement with Barrick Gold (NYSE: GOLD) to acquire 100% of Eskay Creek. The reserves contain 3.88 million ounces at 4.57 g/t AuEq in the Proven and Probable categories.
Since Eskay has been in production, over $2 billion has been invested in infrastructure in the area — a prime example of how to plan and put an excellent infrastructure plan in place. This includes all-weather road access and proximity to the new 287-kV Northwest Transmission Line. The Volcano Creek Hydroelectric Power Station is only 7 km away.
The payout, based on a prefeasibility study completed in July 2021, could be huge. It highlighted an after-tax NPV5% of C$1.4B, 56% IRR and a 1.4-year payback at US$1,550/oz Au and US$22/oz Ag. A feasibility study is expected to be released in 2022.[13]
PRETIVM RESOURCES: Recently acquired by NEWCREST MINING LIMITED (OTC US: NCMGF / TSX: NCM / ASX: NCM)
In November 2021, Australia-based Newcrest Mining, noting the huge potential of Pretivm Resources’ holdings, agreed to acquire the company including 100% of the Brucejack Mine. The operation was finalized in March 2022.[14]
Production in Brucejack commenced in 2017. It is considered to be one of the highest-grade gold mines (16.2 g/t) to have opened in recent years, with estimated reserves of 4.2 million ounces of gold.[15]
The Brucejack project comprises an area of 1200 sq. km. Although in 2018 Pretivm released disappointing results, the company redeemed itself when it made a new high-grade gold exploration discovery at the Golden Marmot Zone.
Assays for the first nine drill holes showed eight that intersected gold with a highlight of 53.5 metres grading 72.5 grams per tonne gold including 05 metres grading a bonanza 6,700 grams per tonne gold and 3,990 grams per tonne silver. In November of that year, Newcrest Mining made its move.[16] Stay tuned for more news as operations develop.
In my opinion, when I look at the history of the Golden Triangle, there are 3 components that mark out the immense potential of the area.
With these above elements and some of the recent movements I have outlined in this article, this is an exciting time for the Golden Triangle. I believe that there may be come amazing opportunities for investors to add some real ‘shine’ to their investments. The area is a golden one, indeed!
Kal Kotecha, PhD
for Investors News Service
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[1] Glacial Melt in British Columbia’s Golden Triangle Uncovers New Discoveries https://investingnews.com/innspired/british-columbias-golden-triangle-mining-district-is-known-for-million-ounce-gold-deposits/
[2] Phil Gracin (July 2020): The Golden Triangle: British Columbia’s Exploration Hotbed: https://thedeepdive.ca/the-golden-triangle-british-columbias-exploration-hotbed/
[3] Phil Gracin (July 2020): The Golden Triangle: British Columbia’s Exploration Hotbed: https://thedeepdive.ca/the-golden-triangle-british-columbias-exploration-hotbed/
[4] Skeena Resources: The Golden Triangle: https://www.visualcapitalist.com/story-golden-triangle-british-columbia/
[5] BC Gold Adventures: McDame Creek: https://bcgoldadventures.com/mcdame-creek/
[6] Canadian Mining Report: An Overview of the Golden Triangle: https://www.canadianminingreport.com/news/custom/An+Overview+of+the+Golden+Triangle
[7] Phil Gracin (July 2020): The Golden Triangle: British Columbia’s Exploration Hotbed: https://thedeepdive.ca/the-golden-triangle-british-columbias-exploration-hotbed/
[8] Canadian Mining Report: An Overview of the Golden Triangle : https://www.canadianminingreport.com/news/custom/An+Overview+of+the+Golden+Triangle
[9] Jeff Desjardins (July 2016): The Story of the Golden Triangle in British Columbia: https://www.visualcapitalist.com/story-golden-triangle-british-columbia/
[10] Seabridge Mineral Reserves and Resources (December 2020): http://www.seabridgegold.net/resources.php
[11] Phil Gracin (July 2020): The Golden Triangle: British Columbia’s Exploration Hotbed: https://thedeepdive.ca/the-golden-triangle-british-columbias-exploration-hotbed/
[12] Seabridge Gold Project Updates: https://www.seabridgegold.com/projects/kerr-sulphurets-mitchell#updates
[13] Skeena Resources: https://skeenaresources.com/eskay-creek/overview/
[14] Newcrest Mining Limited: https://www.newcrest.com/our-assets/brucejack
[15] Phil Gracin (July 2020): The Golden Triangle: British Columbia’s Exploration Hotbed: https://thedeepdive.ca/the-golden-triangle-british-columbias-exploration-hotbed/
[16] Amanda Stutt (January 2022): This history, and the future of British Columbia’s Brucejack Mine: https://www.mining.com/the-history-and-the-future-of-british-columbias-brucejack-mine/
[17] Streetwise Reports (September 2018): Golden Triangle a Bright Spot in in Gold Exploration: https://www.streetwisereports.com/article/2018/10/09/golden-triangle-a-bright-spot-in-gold-exploration.html
