The Northern Miner’s 1990
(posted in Northern Miner – Mining Person of the Year Award)
Since 1915, the Northern Miner weekly newspaper has chronicled Canada’s globally significant mining sector.
A dozen different companies optioned and explored the Eskay Creek property north of Stewart, B.C., over the past half century before its real potential began to emerge in the fall of 1988. That’s when Murray Pezim, 70, Canada’s best known mining promoter, backed a recommendation by Chet Idziszek, 43, and his team of geologists to drill the Eskay Creek project brought to Pezim for financing by a little known junior called Calpine Resources.
Today Eskay Creek is recognized as being among the most significant of discoveries made in Canada since the Hemlo gold deposits were found in Ontario in the early 1980s. The two projects have some interesting parallels, not the least of which is the fact that Murray Pezim played a significant role in advancing each of these geologically unique and truly world-class discoveries.
The Eskay Creek discovery also focused attention on the under-explored and often underestimated mineral potential of northwestern British Columbia. And it underscored the important but often thankless role played by the Vancouver Stock Exchange in providing funds for juniors to carry out high-risk exploration.
It is for their roles in the discovery and development of the Eskay Creek deposits that The Northern Miner has named Murray Pezim and Chet Idziszek jointly as Mining Men of the Year for 1990.
Theirs is an unlikely partnership. Pezim, is flamboyant, sometimes abrasive, a workaholic and an unabashed risk-taker. He came to Vancouver from Toronto in 1965. Since then, his career has been a roller-coaster ride of triumphs and tribulations. Notwithstanding the pall over his reputation cast by a recent investigation by the British Columbia Securities Commission, Pezim’s contribution to mineral exploration in Canada is assured by his role at Eskay Creek, Hemlo and other areas.
Idziszek, holder of a M.Sc. degree from McGill University, is a personable and respected professional geologist whose technical skills have steered the Eskay Creek project through some challenging times. Without the conviction of his technical expertise, Eskay Creek might still be just a remote watershed in British Columbia’s rugged hinterland.
It took 76 drill holes before Hemlo even began to be taken seriously, and 109 holes before Eskay Creek became widely accepted as a truly significant discovery.
Geological reserves at Eskay Creek today stand at 4.36 million tons of 0.77 oz. gold and 29.12 oz. silver, the bulk of which is classed as probable reserves in the 21B zone which is also rich in zinc, lead and copper sulphides.
Idziszek’s involvement with Pezim began in February, 1987, when he moved to Vancouver from Toronto to head up Prime Explorations, the exploration arm and wholly owned subsidiary of Prime Resources. Its main role was to seek out new exploration and development projects and manage programs on existing properties throughout North America for the Prime group of companies (about 50 at the time).
Idziszek may have been coaxed to move to Vancouver by his wife, Nell Dragovan. Back in the early 1980s, she played an important role in acquiring some Hemlo gold properties for a Vancouver-based junior that later became Corona (TSE).
Before Eskay Creek, Idziszek was the main driving force responsible for the identification and evaluation of the Snip gold deposit as an acquisition target for Prime Resources. It is now being readied for production by Cominco (TSE), which has a 60% interest and is operator. Once up to full speed, Snip is expected to produce 93,000 oz. gold annually.
In the summer of 1988, after a technical evaluation, Idziszek and geologists James Foster and David Mallo (Idziszek’s former colleagues at Gold Fields Canadian Mining) recommended Prime take on the Eskay Creek project. At the time, Calpine was hard pressed to raise $900,000 which it needed to spend to earn a 50% interest from Stikine Resources (VSE), then known as Consolidated Stikine Silver.
Pezim and associate John Ivany agreed to finance and acquire an interest in the company, which eventually became a subsidiary of Prime Resources Group (VSE). A fall drill program was outlined by Prime Explorations based on a detailed office evaluation of previous results, some interpretative work, surface geological mapping and a soil geochemistry program.
A month or so later, as part of a 6-hole drill program contracted to Keewatin Engineering, a significant gold discovery was made when the last hole of the program intersected 96.5 ft. of 0.75 oz. gold and 1.13 oz. silver per ton.
Prime picked up important clues for its drill program after it reviewed results from a 1985, limited drill program carried out by Kerrisdale Resources in an area adjacent and peripheral to what is now the 21A zone. Kerrisdale was unable to raise funds to continue work and its option from Stikine was dropped. But had it been able to come up with the funds to carry out the next phase of drilling recommended by its consulting geologists, David and Virginia Kuran, Mallo said the Eskay Creek story “could have been a very different one.”
Encouraged by initial results, Pezim raised funds to carry out an expensive drilling program through the winter of 1988-89 (one of the worst on record). As the drilling progressed, however, it became apparent that the 21A zone was metallurgically complex with limited tonnage potential.
In the summer of 1989, drilling on the 21A zone was suspended in favor of an accelerated program on the 21B deposit, where some widely spaced stepout holes at the end of the winter program (holes 67, 68, 69) had revealed high-grade gold and silver mineralization associated with base metals. The two zones are separated by an approximate 500-ft.-long weakly mineralized area.
It was a gamble that paid off handsomely. Results kept getting better and better until a widely spaced stepout hole drilled on an induced polarization target at the northern end of the property made history.
The now-famous hole 109 returned a 682-ft. interval grading an average of 0.87 oz. gold, 0.97 oz. silver, 1.12% lead and 2.26% zinc. In the process, the spectacular hole triggered a trading frenzy on the Vancouver Stock Exchange.
Ongoing work led to geological reserve calculations, metallurgical studies which returned positive results from 21B zone mineralization, and an underground program to provide information for mine planning feasibility studies. In addition, several new zones were discovered which increased the property’s reserve potential.
Headed by Idziszek, the team responsible for the Eskay Creek discoveries includes Mallo and Foster as well as field managers Ron Fenlon and Gerry McArthur.
But credit must also be given to Tom Mackay, the prospector who explored Eskay Creek in 1932 and who first believed in its potential. His widow, Marguerite, held on to the property through Stikine Resources, which was later acquired about equally by Corona and Placer Dome (TSE). (The acquisition provided a handsome return to Stikine shareholders.) Corona, which currently has the larger stake in the project, hopes to name the mine after Mackay.
Also, Pezim’s contributions have been more than financial. He solidly backed his technical people and promoted Eskay Creek to anyone who would listen. And he got a better response than in the early 1980s when he tried to convince a skeptical industry that mines were ready for the making at Hemlo.
“Gold mines were found by guys like Placer and Noranda, not by some raggedy-ass VSE promotion,” said author Frank Keane describing the prevailing attitude in the early Hemlo days in his book Pezim, Tales of a Promotor.
But industry skepticism lingered at Eskay Creek (does lightning really strike twice?), and it was not until the deposit was substantially drilled off that two majors, Corona and Placer Dome, moved to acquire their direct interests in the project.
All the fanfare at Eskay Creek in the summer of 1989 landed Pezim and several associates in hot water with British Columbia’s securities regulators. They were recently cleared of insider trading and breach of directors’ duties, but Pezim is now trying to appeal a 1-year trading ban imposed on him for contraventions of disclosure requirements during a hectic period in 1989 when drilling was taking place at Eskay Creek.
Pezim and Idziszek are currently heading up Prime Equities, which has a host of junior companies under its corporate umbrella. And, as Mallo says, “there will be more discoveries.”