Skeena’s El Corazon results disappoint

Vancouver – Shares of Skeena Resources (SKE-V, SKREF-O) dropped 30% on high volume following drill results from its El Corazon project in northwestern Ecuador, returning gold values of up to 8.8 metres of 6.2 grams gold per tonne in hole SKE-032.

The best core hole cut mineralization at 262.2 metres downhole depth and included a 2-metre interval grading 22.56 grams gold. It was collared to test a series of pyritic and weakly copper-mineralized siliceous hydrothermal breccias interpreted as a down-dip extension to the “mine sequence” currently being exploited by a small-scale underground operation.

Results from this year’s first seven drill holes averaged about 2 grams gold across widths of 2-to-10 metres. Skeena remains optimistic on its targeted breccia unit, reviewing down-dip continuity of over 850 metres, more than 200 metres of lateral extent and average thickness of 20-to-30 metres. Further assays are pending from other holes targeting three other areas.

Epithermal gold mineralization at the project occurs in an andesitic volcanic sequence intruded by an explosive rhyolite breccia. The silicified breccia exhibits stockwork quartz veining typically highly enriched in gold with lesser grades in the peripheral andesites.

El Corazon was initially acquired by Rio Tinto (RTP-N) in 1995 following a government geochemical survey. The major subsequently drilled the property returning broad intervals of 1-to-2 grams gold over widths of up to 90 metres. Additional drilling in the late-1990s by other companies intersected high-grade values of up to 49 grams gold across 23.7 metres but the property was dropped due to market conditions.

Skeena acquired its option in mid-2003 from private Ecuadorian company AgroIndustrial, comprised of ex-Rio Tinto personnel, which now operates the small-scale underground mine on the project targeting the previously identified high-grade material. AgroIndustrial is boosting its operating rate to 50-tonnes-per-day.

Skeena’s share price began to rise in early September from the 36-level, rallying to a high of $1.07 later in the month with anticipation of drill results. The stock closed off 25 at 58 per share on trading volume of over 6.5 million following the assays.