CEO Notes

Note from Eskay Mining published on Minesite.com in London, England

September 5, 2010

I was in London last week to meet with parties relative to our company. This article was written by Alastair Ford a journalist at Minesite.com. I have previously mentioned on several occasions that enticing institutions to listen to our exploration story is difficult. Firms want near production to invest in today’s market. However, I do note that several companies in the Yukon are having success with their drilling programs and are getting some needed traction.

The metal markets continue to perform which is to our future benefit.

Minesite.com is a free site available to all.

Our summer drilling/geological program is progressing on plan.


Mac Balkam, CEO
Eskay Mining Corp.

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September 09, 2010
Eskay Mining Is Hoping For A Game-Changing Drill Hit From Its Ongoing Exploration Campaign In British Columbia
By Alastair Ford

It can be uphill work trying to get London’s investment community interested in an early stage exploration play, even if it is in gold, and even if it is in a safe jurisdiction. The hesitancy isn’t about the commodity or the geography; it’s about the business model. London has always liked its blue sky exploration supported by a decent slug of cashflow from a producing mine. And, with so much money lost and never to return during the financial crisis, that’s probably truer now than ever before. To be fair, the City would probably also like royalty companies, if there were any around for it to invest in. But, saving the investment house Anglo Pacific, which is well respected, but which has also recently listed in Canada in an attempt to find a peer group, there isn’t. So exploration supported by cash flow, it is. That’s the specialty, and by and large it suits London down to the ground.

Every now and then, though, you wonder if the City might be missing a trick. Mac Balkam from Eskay Mining was recently in town, doing what rounds he could. And although he did get in to see a fair few people, there were plenty more for whom Eskay’s early stage elephant hunt in the wilds of British Columbia held little appeal. That’s a shame, because the Eskay story is a good, perhaps even a great story, and anybody who passes up the opportunity to hear it may also be passing up the opportunity of investing in a company that could go from being worth millions to being worth billions if it gets the drill hits it’s hoping for.

“Our property has the potential to host another Eskay Creek”, says Mac simply. Right there, distilled, into a single short sentence, is the key to the story. From the time of its discovery in 1989 by a Canadian junior, right up to its heyday as one of Barrick’s flagship operations, Eskay Creek has always looked like a Cadillac among mines. Indeed it ended up becoming one of the most prolific mines in the world, and at one stage was the second richest gold mine in Canada, and the fifth largest silver producer in the world. The grades were good, and, until it was eventually mined out in 2008, the profits were huge. Two things about that stand out as far as Eskay Mining is concerned. The first relates to infrastructure; the second to geology. Eskay holds all the ground around the old Eskay mine, and then some. Indeed, its total land package of 130,000 acres is described by Mac, at one point, as “too much for a junior”. That succinct statement may be a subtle signpost to the way ahead, but in the nearer term, the proximity of the old road to Eskay Creek, and the well- established precedent of local mining set by Barrick, mean that any major discovery from Eskay Mining would already be well served by infrastructure. Not far away, a new power line called the Northwest Transmission Line, is just going in.

Before any of that comes into play, though, Eskay needs to find something big enough to merit further work. The geological precedents are interesting to say the least. First off, it’s worth noting that directly to the east of huge swathes of Eskay ground lies the license that hosts Seabridge’s Kerr-Sulphurets-Mitchell project. This hosts, as at the last count in January, 38.9 million ounces of gold and 10 billion pounds of copper. Beyond that lies Silver Standard ground, and two projects that also host prolific amounts of metal – the Snowfield project, with 19.8 million ounces of gold and 50.9 million ounces of silver in the measured and indicated categories, with more inferred, and the Brucejack project, with four million ounces of gold and 65.4 million ounces of silver in the measured and indicated categories, also with more inferred. Add them all up and you are talking hundreds of millions of ounces of gold and gold equivalent, albeit that these are all huge low-grade, bulk tonnage targets.

It’s elephant country alright, and what makes the Eskay proposition interesting is that after the model of Eskay Creek itself the company is targeting volcanogenic massive sulphide (VMS) targets, rather than low grade disseminated mineralisation like the properties currently under development by Silver Standard and Seabridge. Many market participants in Canada and elsewhere have expressed reservations about whether any real development will ever come up at Kerr-Suphurets-Mitchell, although to be fair it has already made it through the pre-feasibility stage. But that’ll be neither here nor there as far as Eskay Mining is concerned if it can hit another major VMS deposit.

“The Eskay rift is 32 kilometres long”, says Mac. “And we’ve got 27 kilometres of it.” The rest is owned by Barrick, which is pulling out, and wouldn’t mind an opportunity to get to work on that ground too. “I’d like to approach Barrick”, he says. “If this were a really interesting market, in which I could finance easily, I would want to take a run at the Barrick ground.” The market’s tight, though, so for the time being Mac will have to content himself with the current drill programme, which is working up at the SIB-Lulu prospect on Eskay’s ground a few kilometres to the south of Eskay Creek. “It would be nice to get a big drill-hole”, says Mac, but even if the blue sky is huge, he’s not getting overly romantic about it. “What you need is science and luck.”

Eskay has around 35 days of drilling left up in those British Columbia mountains, and the really interesting time will be when the results from that campaign start to come back from the assay labs. At that point we’ll know, at least on first pass, whether those who bought into Mac’s story early were being clever, or over-optimistic. But if the company does get a big drill hit, it’s more than likely that Mac will come back through London again, perhaps looking for money to take it to the next level. No doubt at that stage the wise heads will be eager to open their doors to him.