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SV Rating: Bottom-Fish Spec Value - as of December 30, 2022
What's Next?
Updated September 18, 2020: Eskay Mining Corp was made a Bottom-Fish Spec Value rated Favorite at $0.215 on June 29, 2020 after CEO Mac Balkam cleaned up the balance sheet and raised $2.4 million to fund a major rethink of the SIB-Corey project in the Golden Triangle where efforts to find Eskay Creek 2 have been frustrated for decades (see Tracker June 29, 2020). The rethink initiative was launched in Q4 of 2019 when ESK brought Quinton Hennigh on board. He in turn recruited VMS experts John Monecke and John Dedecker to assist with a reinterpretation of the 25 km long property in the middle of a very prolific part of the Golden Triangle. This was a year after SSR dropped its 60% option on the SIB-Lulu portion after spending $8 million on a new approach based on the idea that the Coulter Creek Thrust fault coming from the east had decapitated the gold-silver enriched Lulu mudstone from the tilted VMS prospective Salmon River stratigraphy and displaced it westwards, an approach proposed earlier by Hennigh. Dedecker took a detailed look at the SSR drill data, confirmed that the subtle alteration on the SIB claim is indeed related to VMS style hydrothermal processes, and made the startling discovery that the Coulter Creek Thrust was backwards, rising from the west rather than the east and pushing younger Bowser Lake rocks over the Salmon River Formation. The past exploration goal was to find the Contact Mudstone which hosts the extremely rich 2.5 million tonne Eskay Creek deposit, but under the new Coulter Creek Thrust hypothesis this unit would be under the Bowser Lake sediments west of where all the drilling was done. The Lulu Zone mineralization was hosted by a "lower" carbonaceous mudstone unit into which fluids from a VMS feeder had bled laterally on their way to a seafloor vent at the Contact Mudstone unit (it is called "Contact" because it was buried by a post-mineral basalt flow) where something like the Eskay Creek deposit might have formed. So the potential for another Eskay Creek style deposit in the SIB-Lulu area just south of Skeena's property effectively remains untested. Once Dedecker figured this out, the question arose, how much else of the past exploration strategy was based on a misunderstanding of the geology? So in July 2020 Dedecker embarked on a program to relog and re-assay samples of the historic core stored in a warehouse, and then spent much of the summer at the SIB-Corey project visiting the known showings and remapping the geology. It turns out past exploration programs did not have a coherent understanding of the geology, and that the entire SIB-Corey project needed to be re-assessed, not just the SIB-Lulu area. This enabled ESK to raise an additional $3.4 million during the summer at $0.45 for hard and at $0.645 for flow-thru dollars. A decision was also made to fly a Skytem Mag-EM survey over the northern part of the property whose conductors were supposed to be the basis for a drill program, but bad weather prolonged this survey so that its final interpreted results will not be available until early October. IP surveys have also been done over selected targets but are only finishing now. Dedecker's digital compilation of the 30 holes drilled in 1995-96 on the Jeff and TV targets, gold bearing VMS style mineralized showings about 2 km apart, revealed that the past drill holes did not properly assess what appear to be stacked, east dipping lenses within a carbonaceous mudstone unit. A 3,000 m plus drill program began on August 21; a second rig was added in mid September when about 1,000 m had been drilled. The program is currently in a race against the weather with mid October projected to be the end of the season. Because the geophysical surveys took so long to complete Dedecker has designed a program of very small stepouts from the Jeff and TV zones in an attempt to establish their geometry and the geology of the area, which in turn will be used to calibrate the geophysical data for assessment in 2021 of new targets revealed by the Skytem survey. The company is not talking about the drilling program which will include some more aggressive holes in the 2 km segment between Jeff and TV, and, given the slow assay lab turnaround, we may not get a drill results report until late November. The north-south oriented footprint of the Jeff-TV zone is bigger than that of Eskay Creek, so there is room for a discovery hole during the 2020 season. But this summer's work will lay the foundation for a substantially bigger program in 2021 which may include deeper drilling in the SIB-Lulu area to test the revamped Coulter Creek Thrust hypothesis. Dedecker has also pointed out that field work highlighted other showings such as Spearhead, Tet, Cumberland and the intriguing C10 area which has a significant gold footprint that is not related to a VMS style hydrothermal system. Following the recent financing Eskay Mining Corp has 168.3 million fully diluted, which at $0.84 implies a $141 million value for the 100% owned portion, and $177 million for the 80% owned portion. An Eskay Creek clone would be worth CAD $4.7 billion today and under the rational speculation model that valuation is above the fair value channel for such an outcome, though for the 100% owned ground it is within the fair spec value range. Since Eskay Mining Corp has a meaningful exploration program underway at SIB-Corey, which will not exhaust the capital raised this summer, a Bottom-Fish Spec Value rating no longer applies. Accordingly effective September 18, 2020 Eskay Mining Corp is converted to a Fair Spec Value rated Favorite at $0.84. The Jeff-TV drilling has the potential to deliver a discovery hole, and will most certainly deliver a better understanding of the mineralization in this area. In the absence of flashy drill results the stock will be subject to end of year seasonal pressure. The degree that the stock price remains resilient will hinge on the new exploration potential that this summer's "rethink" grunt work has unveiled.
Corporate Change History
#Old for New
Last Price
Prior Name
Subsequent Name
Details
Nov 19, 2001
Name Change
3:1
$0.03
Kenrich Mining Corp (KRC-V)
Kenrich-Eskay Mining Corp (KRE-V)
Nov 3, 2009
Name Change
1:1
$0.20
Kenrich-Eskay Mining (KRE-V)
Eskay Mining Corp (ESK-V)
Recommendation History
Edition
Date
Price
Recommendation
Gain
BF2016
4/12/2017
$0.31
New BF Buy $0.30-$0.49
-37%
BF2016
5/15/2018
$0.23
Confirm BF Buy $0.30-$0.49
-53%
BF2016
7/30/2018
$0.25
Confirm BF Buy $0.30-$0.49
-49%
BF2016
12/13/2018
$0.10
BF Technical Closeout 100%
-80%
SVF2020
6/29/2020
$0.22
Bottom-Fish Spec Value Favorite
0%
SVF2020
9/18/2020
$0.84
Fair Spec Value Favorite
282%
SVF2020
12/31/2020
$2.20
Fair Spec Value
900%
SVF2022
12/31/2021
$2.77
Fair Spec Value Favorite
0%
SVF2022
12/30/2022
$1.12
SV Technical Closeout 100%
-60%
Ranking within Company's Price Range based Group
All TSX-TSXV KRO as of Oct 16, 2023
Group Median
Company
Percentile
Score
Price Range:
$0.50-$0.75
Issued:
89,068,612
183,617,123
24.2%
23.5%
Price Group Total:
66
Working Cap:
$3,250,102
($2,776)
22.7%
TSXV KRO as of Oct 16, 2023
Group Median
Company
Percentile
Score
Price Range:
$0.50-$0.75
Issued:
62,938,029
183,617,123
16.3%
20.4%
Price Group Total:
49
Working Cap:
$2,165,117
($2,776)
24.5%
Group figures exclude delisted and suspended companies. The higher the company percentile the better, based on the assumptions that the lowest issued shares and highest working capital are best. The score is the average of the percentiles. A percentile is that percentage of a group that a member ranks higher than. Note that issued and WC reflect latest financials.
Ranking Color Code:
Lower than 25%
25% to 50%
50% to 75%
Higher than 75%
Charts & Financing Activity
Most recent 43-101 resource estimate Prior resource estimate PEA PFS FS/BFS/DFS
Private Placement Key
less than $500,000
$1,000,000 - $2,000,000
$5,000,000 - $10,000,000
$20,000,000 - $50,000,000
$500,000 - $1,000,000
$2,000,000 - $5,000,000
$10,000,000 - $20,000,000
over $50,000,000
Private placement financing dates and value ranges are based on transactions reported by the TSXV Monthly Review.
Past Insiders and Reported Shareholders - Current Ownership Status unknown - positions may be pre-rollback
Related Party
Occupation
Related Since
Insider Ended
Director Ended
Capacity
Ownership
Jerry D. Blackwell
Geologist
9/21/2009
12/2/2009
12/2/2009
Director
0
Wally E. Boguski
Businessperson
8/31/1997
12/15/2009
12/15/2009
Director
389,666
Doug Chalmers
7/28/2010
9/12/2011
9/12/2011
Director
1,839,000
Art D. Ettlinger
Deceased
12/21/2010
1/1/2011
Advisory Board
0
David Hodge
Businessperson
12/21/2010
Advisory Board
0
Chet Idziszek
Geologist
3/1/2010
Advisory Board
0
David Mallo
Geologist
3/1/2010
Advisory Board
0
Robert A. Michor
Businessperson
4/26/1991
10/4/2010
10/4/2010
Director
225,441
Thal S. Poonian
Businessperson
10/8/2002
10/20/2009
10/20/2009
Director
0
Larry Riggin
Broker
6/1/2012
Placee
200,000
John Wilson
Broker
10/12/2011
Placee
500,000
Share positions of current insiders based on last AGM circular, ownership % based on current Issued. Share positions of past insiders and shareholders have not been adjusted for rollbacks or splits.
Active Index Memberships
Membership Start Date:
December 31, 2021
Start Price:
$2.77
KRO Favorites 2022: Features companies designated 2022 KRO Favorites, based on closing price December 31, 2021.
A Spec Value Hunter table allows speculators to identify which projects offer poor, fair or good speculative value according to the rational speculation model. The speculative value depends on the project stage, the project's implied value as calculated by the company's fully diluted, stock price and net project interest, and the dream target deemed appropriate for the project. A dream target is what a project would be worth in discounted cash flow terms once in production.
Poor Speculative Value -
Fair Speculative Value -
Good Speculative Value -
Note: narrow arrows indicate IPV is outside the fair value channel but within 25% of the fair value limits
Color Key for Target Outcome Achievability Ranges in millions ranked from most to least achievable
below $25
Should be Private: Artisanal, Placer, Mom & Pop Shop
$25-$50
Tiny Scale: underground mine or quarry - not worth the bother
$50-$100
Small Scale: junior needs to self-develop
$100-$250
Buyout Target: by Lower Tier Producers
$250-$500
Buyout Target: by Mid-Tier Producers
$500-$1,000
Ideal Target for Junior: Buckhorn, Sleeper
$1,000-$2,000
Almost World Class: Ekati, Red Chris, Brucejack, Juanicipio, Stibnite
$2,000-$5,000
World Class: Eskay Creek, Hemlo, Hermosa-Taylor, Oyu Tolgoi, LaRonde, McArthur
$5,000-$10,000
Giants: Escondida, Sullivan, Carlin Trend, Kidd Creek, Orapa, Kamoa-Kakula
above $10,000
Off the Scale District: Wits 1.0, Araxa, Sudbury Basin, Bayan Obo
The target outcome range required for the current implied project value to represent fair speculative value is based on the upper and lower certainty limits associated with the project stage. The color coding is based on the target outcome using the mid-point of the certainty range.
Net Interest: 100% WI Vested: Yes Uncapped NSR/GOR: 1.00%
Ownership Terms: Formerly called SIB-Lulu, combined with Corey project after ESK increased 80% interest to 100%. Option May 8, 2008 to earn 80% from St. Andrew's Goldfields (now Kirkland Gold) for $4 million exploration as well as 1,750,000 shares and $200,000 by May 7, 2012. Eskay vested on Jan 23, 2013. On Jan 26, 2017 Eskay optioned a net 60% to Silver Standard which can earn 51% by spending $11.7 million over 3 years, with $3.7 million in Y1, $4 million in each of Y2 and Y3. If the price of gold does not meet a minimum threshold in an option year the required spend is $2 million and the term is extended a year. Upon vesting for 51% Silver Standard can go to 60% by delivering a PEA or drilling 23,000 m. Kirkland Gold must fund its 20% share of expendeitures or dilute. If Kirkland dilutes to 10% its working interest converts to a 2% NSR. On Nov 9, 2018 SSR dropped the option after spending $7.7 million. Agreement Mar 25, 2021 whereby Kirkland Lake exchanged its 20% interest for a 2% NSR of which ESK can buy 1% for $3 million and has a right of first refusal on the remaining 1%.
Target Metals: Gold Silver Copper Lead Zinc
Model: VMS
Stage: 2-Target Drilling
Notes on Eskay Project
This property encompasses 33,000 Hectares immediately adjacent to the prolific Eskay Creek mine owned by Barrick Gold.
Visualized Outcome: Eskay Mining - Eskay as Eskay Creek II
The SIB-Lulu property starts about 4 km southwest of the former Eskay Creek mine-site and covers the strike extension of the Eskay Rift stratigraphy. The Lulu Zone was intersected in 1991 about 3 km from the claim boundary and yielded 14 m of 14.4 g/t gold and 1,059.5 g/t silver within a siliceous carbonaceous mudstone similar to that which hosts the Eskay Creek deposit (2.5 million tonnes @ 43 g/t gold, 2,208 g/t silver, 5%-6% zinc and 0.7%-0.8% copper). Followup drilling failed to establish any strike or downdip extent to the LuLu Zone. Further work led to the conclusion that the Lulu Zone is within the hanging wall of the Coulter Creek thrust fault which detached this tip from a possible iceberg within the footwall. This model drove SSR's $8 million drill program in 2017-2018 before it dropped the option in early 2019. The latest interpretation driven by John Dedecker, brought on board by Quinton Hennigh, is that the thrust fault is backwards, that in fact it is Bowser Lake rocks that have been thrust from the west over the tilted stratigraphy and that the Lulu zone is a feeder zone in the footwall of the contact mudstone that hosts Eskay Creek, whose projection under Bowser rocks is untested. The mudstone host of the Lulu mineralization has been a red herring because it is an older horizon that would be beneath the mudstone that evolved a VMS system similar to Eskay Creek. The rethink QH's team launched in 2020 now posits a previously unrecognized 25 km strike of prospective VMS stratigraphy reaching all the way to the Cumberland-Tet targets which are on the 100% owned Corey claims. A key focus in 2020 will be the Jeff-TV area which is on the 80:20 JV with Kirkland Lake. The Eskay Creek stratigraphy has been fault displaced eastward in this area. The purpose of this OV is to demonstrate what the discovery of another Eskay Creek deposit would be worth.
Source Note: The Eskay OV is based entirely on the Eskay Creek deposit discovered in 1989 and turned into an underground mine in 1995 which initially direct shipped ore to smelters in BC and Japan. The mine operated until Barrick shut it down in 2008. It produced 3.5 million oz gold and 180 million oz silver. The cost assumptions are based on historical data Barrick provided in 2004 when the mine was operating at about 700 tpd.
Visualized Outcome Summary: Eskay Mining - Eskay as Eskay Creek II
LOM Payable: 3.2 million oz gold, 165.0 million oz silver, 249.0 million lb zinc, 38.9 million lb copper
Economic Outcome (USD): Revenue Model at OV designated Metal Prices
Annual Average
Life of Mine (LOM)
LOM Stats
Recoverable Revenue:
$971,117,210
$9,502,125,342
$3,801/t ore Recoverable Value:
Smelter/Transport Costs:
($23,707,517)
($231,971,794)
2.4% of Recoverable Revenue
Gross Payable Revenue:
$947,409,693
$9,270,153,547
97.6% of Recoverable Revenue
Royalties:
($9,474,097)
($92,701,535)
1.0% of Gross Payable Revenue
Net Payable Revenue:
$937,935,596
$9,177,452,012
96.6% of Recoverable Revenue
Mining Cost:
($35,770,000)
($350,000,000)
24% of OpEx - $140.00/t ore
Processing Cost:
($105,010,500)
($1,027,500,000)
70% of OpEx - $411.00/t ore
Other Cost:
($6,643,000)
($65,000,000)
4% of OpEx - $26.00/t ore
Sustaining Cost:
($2,500,000)
($25,000,000)
2% of OpEx - $10.00/t ore
Total Operating Cost:
($149,923,500)
($1,467,500,000)
16% of Net Payable Revenue - OpEx - $587.00/t ore
Pre-Tax Cash Flow:
$788,012,096
$7,709,952,012
84% of Net Payable Revenue - $3,083.98/t ore
Taxes:
($271,915,345)
($2,663,483,204)
35% of Pre-Tax Cash Flow - $1,065.39/t ore
After-Tax Cash Flow:
$516,096,751
$5,046,468,808
55% of Net Payable Revenue - $2,018.59/t ore
Note: Concentrate transport costs, smelter treatment costs and retention are subtracted from recoverable revenue to get gross payable revenue to which the uncapped royalty rate for the project is applied. The annual average of LOM sustaining cost is expensed as an annual operating cost. Annual average figures reflect full production years.
Economic Outcome (USD): Royalty Model for 1% NSR at OV designated Metal Prices
Mine Life:
10 years
Startup
NPV 5%
NPV 10%
NPV 15%
Annual Avg NSR:
$9,379,356
Now
$67,795,605
$51,685,141
$40,498,906
LOM NSR:
$91,774,520
2021
$74,744,655
$62,539,020
$53,559,803
Economic Outcome - Discount Rate: 9.5% - CAD AT NPV: $3.8 billion - Fair Speculative Value
Gross Rock Value (USD/t):
$4,004
Recoverable Rock Value:
$3,801
Payable Rock Value:
$3,708
LOM Net Payable Revenue (USD):
$9,177,452,012
LOM PT Cash Flow (USD):
$7,709,952,012
LOM AT Cash Flow (USD):
$5,046,468,808
USD Pre-Tax NPV:
$4,364,477,821
Pre-Tax IRR:
788.0%
Pre-Tax Payback:
0.1
USD After-Tax NPV:
$2,827,842,519
After-Tax IRR:
519.1%
After-Tax Payback:
0.2
CAD Fair Spec Value Low:
$38,385,134
CAD Fair Spec Value High:
$95,962,836
CAD Implied Project Value:
$82,512,104
Price Target if Visualized Outcome delivered by Expl-Dev Cycle without dilution: CAD $19.31
Fair Speculative Value Stock Price Range: CAD $0.19 - $0.48
MSV (Market Cycle S Curve): Market Speculative Value represents the typical market pricing pattern of a new discovery as it moves through its exploration-development cycle. The irrational pricing behavior of the yellow channel contrasts with the fair speculative value of the blue channel as defined by the rational speculation model because during the pre-economic study stages there is great uncertainty about how big the discovery will turn out.
Fair Speculative Value Ladder
USD OV NPV
CAD OV NPV
Exch Rate
Diluted
Net Interest
$2,827,842,519
$3,838,513,435
1.3574
198,824,346
100.00%
Project Stage
Uncertainty Range
CAD FSV Range
CAD FSV per Share Range
CAD MSV per Share Range
Grassroots
0.5% - 1.0%
$19,192,567 - $38,385,134
$0.10 - $0.19
$0.19 - $0.48
Target Drilling
1.0% - 2.5%
$38,385,134 - $95,962,836
$0.19 - $0.48
$0.48 - $0.97
Discovery Delineation
2.5% - 5.0%
$95,962,836 - $191,925,672
$0.48 - $0.97
$0.97 - $14.48
Infill & Metallurgy
5% - 10%
$191,925,672 - $383,851,343
$0.97 - $1.93
$9.65 - $19.31
PEA
10% - 25%
$383,851,343 - $959,628,359
$1.93 - $4.83
$4.83 - $14.48
Prefeasibility
25% - 50%
$959,628,359 - $1,919,256,717
$4.83 - $9.65
$4.83 - $9.65
Permitting & Feasibility
50% - 75%
$1,919,256,717 - $2,878,885,076
$9.65 - $14.48
$4.83 - $9.65
Construction
75% - 100%
$2,878,885,076 - $3,838,513,435
$14.48 - $19.31
$9.65 - $14.48
Production
100%
$3,838,513,435
$19.31
$19.31 - $24.13
Market Speculative Value Stock Price Range: CAD $0.48 - $0.97
Warning: while the market spec value (S-Curve) and fair spec value channels presented in project value terms track the evolving expected ultimate outcome value, when presented in stock price terms the expected stock prices are subject to dilution through future equity financings or project interest farmouts.
Alternative Metal Price Scenarios
Metal 1
Metal 2
Metal 3
Metal 4
Gold
Silver
Zinc
Copper
Spot:
$2,026 /oz
$14.10 /oz
$1.10 /lb
$3.75 /lb
OV Assigned:
$2,026 /oz
$14.10 /oz
$1.10 /lb
$3.75 /lb
Pessimistic:
$1,300 /oz
$14.10 /oz
$1.10 /lb
$3.75 /lb
Optimistic:
$2,300 /oz
$14.10 /oz
$1.10 /lb
$3.75 /lb
Fantasy:
$3,000 /oz
$14.10 /oz
$1.10 /lb
$3.75 /lb
Note: for Metal 1 pessimistic, optimistic and fantasy price scenarios, OV assigned prices are used for Metals 2-4
Economic Outcomes with Alternative Metal Price Scenarios
USD PT NPV
USD PT IRR
USD AT NPV
USD AT IRR
AT Payback yrs
Spot:
$4,364,477,821
788.0%
$2,827,842,519
519.1%
0.2
OV Assigned:
$4,364,477,821
788.0%
$2,827,842,519
519.1%
0.2
Pessimistic:
$3,027,183,846
551.5%
$1,958,601,435
365.3%
0.3
Optimistic:
$4,868,172,247
877.1%
$3,155,243,896
577.0%
0.2
Fantasy:
$6,156,864,128
1,105.0%
$3,992,893,619
725.2%
0.1
Fair Speculative Value for Alternative Metal Price Scenarios
Stage: Target Drilling - 1.0% - 2.5%
CAD AT NPV
CAD Target Price
CAD FSV Range
CAD FSV per Share Range
CAD MSV per Share Range
Spot:
$3,838,513,435
$19.31
$38,385,134 - $95,962,836
$0.19 - $0.48
$0.48 - $0.97
OV Assigned:
$3,838,513,435
$19.31
$38,385,134 - $95,962,836
$0.19 - $0.48
$0.48 - $0.97
Pessimistic:
$2,658,605,588
$13.37
$26,586,056 - $66,465,140
$0.13 - $0.33
$0.33 - $0.67
Optimistic:
$4,282,928,064
$21.54
$42,829,281 - $107,073,202
$0.22 - $0.54
$0.54 - $1.08
Fantasy:
$5,419,953,798
$27.26
$54,199,538 - $135,498,845
$0.27 - $0.68
$0.68 - $1.36
Disclaimer: A visualized outcome is one of many possible outcomes for an exploration project as it moves through the 9 stages of the exploration-development cycle from grassroots to a producing mine with failure as an outcome at any point along the way. The range of possible outcomes for the physical nature of a deposit shrinks after delivery of an initial 43-101 resource estimate. While the nature of the deposit constrains the range of mining scenarios, the cost assumptions will vary as the project moves through the feasibility demonstration stages of the cycle, which affects the economic value of the final outcome. This economic value will also vary according to the prices of the metals targeted for extraction which may change during the years it takes for a project to become a mine. An outcome visualization is thus a compilation of best guess assumptions for the key variables that drive the discounted cash flow model, the basis for assigning an economic value to a mine. An OV is not intended as a prediction, but rather as a framework that allows the incorporation of new information generated by the exploration-development cycle for the project into a valuation model on an ongoing, dynamic basis.
Net Interest: 80% WI Vested: Yes Uncapped NSR/GOR: 0.00%
Ownership Terms: Option May 8, 2008 to earn 80% from St. Andrew's Goldfields (now Kirkland Gold) for $4 million exploration as well as 1,750,000 shares and $200,000 by May 7, 2012. Eskay vested on Jan 23, 2013. On Jan 26, 2017 Eskay optioned a 4,400 ha portion of the 80:20 JV to Silver Standard which can earn 51% by spending $11.7 million over 3 years, with $3.7 million in Y1, $4 million in each of Y2 and Y3. If the price of gold does not meet a minimum threshold in an option year the required spend is $2 million and the term is extended a year. Upon vesting for 51% Silver Standard can go to 60% by delivering a PEA or drilling 23,000 m. Kirkland Gold must fund its 20% share of expendeitures or dilute. If Kirkland dilutes to 10% its working interest converts to a 2% NSR. The remaining 28,600 ha are owned 80:20 by Eskay Mining and Kirkland Lake. To avoid confusion this group has been named SIB-Mitchell and the SSO farmout group is called SUB-Lulu.
Target Metals: Gold
Model: Epithermal Vein
Stage: 2-Target Drilling
Notes on North Mitchell Project
This property encompasses 33,000 Hectares immediately adjacent to the prolific Eskay Creek mine owned by Barrick Gold.