The Snip project in Canada represents the first step in our strategy to add another high-grade project with strong upside

Since October 2021, we have established a positive dialogue with the Tahltan Nation and provincial authorities, designed an ambitious drill programme for 2022, and built a team to take over operations management at the project.

Snip consists of one mining lease and eight mineral claims totalling approximately 4,546 hectares in the Liard Mining Division and is situated in Tahltan Territory. The former Snip mine produced approximately one million ounces of gold from 1991 until 1999 at an average gold grade of 27.5 g/t. Since then, the project has been improved with the recent construction of nearby infrastructure (paved highway, hydro-electric facilities and ocean port facilities) and substantially higher gold prices.

In September 2018, Skeena granted Hochschild an option to earn a 60% interest in Snip over three years by spending twice the amount Skeena had spent since it originally optioned the property from Barrick in March 2016. Up until the exercise of the option, Skeena estimated that it had incurred approximately C$50 million of expenditure on the project. The exercise of the HOC Option was also subject to the following terms:

  • Hochschild must incur no less than C$7.5 million in exploration or development expenditures on Snip in each year of the Option Period (which, provided that Hochschild has incurred at least C$22.5 million on the project, can be extended by a further year on payment of US$1 million to Skeena);
  • On complying with the above, Hochschild must provide 60% of the financial assurance required by governmental authorities for the Snip mining properties; and
  • Hochschild can terminate the HOC Option at any time (with no liability to complete the aggregate spending requirement), but must make a cash payment for any shortfall in the minimum annual spend (or pro-rated minimum annual spend if terminated after the first anniversary of the notice exercising the HOC Option)
  • The initial expenditure requirements of Skeena’s agreement with Barrick Gold Inc. were satisfied by Skeena in July 2017, at which time Skeena exercised its right to acquire all of Barrick’s “right, title and interest in and to the Property and the Permits”, subject to the retention by Barrick of a 51% Back-In Right exercisable upon definition of a Mineral Resource, or extraction from the property, of 2 million ounces of contained gold or gold equivalent and a 1% NSR Royalty. The Back-In Right is exercisable by Barrick on payment, to Skeena, of an amount equivalent to three times of the cumulative expenditure on the Project.

On 1 March 2022, Hochschild announced an updated Mineral Resource Estimate for the project. The mineral resource estimate for the Snip Gold Project is reported at a 3.0 g/t Au cut-off in Table 1 and is effective as of 28 February 2022.

Table 1. Mineral Resource Estimate of the Snip Gold Project

  Domain Tonnes
Contained Grade Au (g/t) Contained Metal Au
(000 oz)
Indicated Mineral Resources        
  Twin Main 2,383 10.6 810
  Twin West 117 7.8 30
Total Indicated   2,500 10.4 840
Inferred Mineral Resources        
  Twin Main 1,852 10.5 623
  Twin West 332 9.4  
Total Inferred   2,184 10.3 723


The mineral resource update follows a drilling programme of 210 surface and underground diamond drill holes totaling 28,039m (see Table 2 and Figure 1). The MRE was completed by Hochschild and was reviewed and validated by Ginto Consulting Inc. (“Ginto”).


Table 2. Summary of drilling campaigns

Programme Year No. of Holes Length (m)
Historical pre-1999 3,542 279,970
Skeena 2016 28 7,422
2017 62 8,703
2018 54 11,298
2019 9 1,902
2020 9 4,542
2021 201 23,497


Note: The table shows only drillholes with complete laboratory results as of 15 January 2022

  1. These mineral resources are not mineral reserves as they do not have demonstrated economic
  2. The mineral resources were carried out in accordance with the standards of the Joint Ore Reserves Committee of the Australian Institute of Mining and Metallurgy (“JORC” code 2012), the National Instrument 43-101 (“NI 43-101” code 2014) and the Canadian Institute of Mining and Metallurgy (“CIM”) Best Practices Guidelines (2019).
  3. A site visit was carried out by Mr. Marc Jutras, P.Eng., M.A.Sc., Principal, Mineral Resources, at Ginto Consulting Inc. between September 8 and September 11, 2021
  4. Results are presented in situ and undiluted and considered to have reasonable prospects for economic
  5. The mineral resource estimate is reported for an underground scenario at a cut-off grade of 0 g/t. The cut-off grade was calculated using a gold price of US$ 1,800/oz, mining cost of US$97.20/t, processing cost of US$25.00/t; G&A cost of US$ 24.70/t, metal recovery of 90%, selling cost of US$ 90.00/oz, and a royalty cost of US$18.00/oz
  6. The number of tonnes and ounces were rounded to the nearest thousand.
  7. Neither the Company, nor Ginto, is aware of any known environmental, permitting, legal, title-related, taxation, socio-political or marketing issues, or any other relevant issues not reported that could materially affect the mineral resource estimate.
  8. The mineral resource estimates are in total for the property and have not been adjusted to reflect the proportion attributable to Hochschild on the basis of their joint venture participation.

Most of the Snip deposit is hosted within a complex interbedded sequence of siltstone and greywacke units. The gold mineralisation is associated with several periods of deformation and syn-tectonic quartz and sulphide veining. Four types of gold mineralisation are recognized on the property: carbonate type, chlorite-biotite type, sulphide type, and quartz type.

A large portion of the gold mineralisation at Snip is found within the Twin Zone, an extensional shear vein system approximately trending east-west and dipping to the south at an average dip varying between 40° and 50°. The shear is intruded by a barren, post mineralisation mafic dyke, the Biotite Spotted Unit (“BSU”) which divides the Twin Zone into two parts for most of its length. Veins in the hanging wall are termed V-veins while those in the footwall are S-veins. The other drill defined mineralized zone on the property is the Twin West Zone, located approximately 500m southwest of the Twin Zone. It is believed to be the continuation of the Twin Zone dextrally displaced by the northeasterly Monsoon Valley fault.

Figure 1. Drill Hole Location Map

In 2022, Hochschild plans on drilling approximately 10,000 metres from underground with approximately 70% of planned metres for infill and twin holes, and 30% for exploration.

A Pre-Feasibility Study will be undertaken during the year, using existing resources and results from the 2022 programme, to trade-off a series of mining and mineral processing opportunities identified at the project, and assess a potential project development route to move to a Feasibility Study.