Disclosure: Eskay Mining Corp. has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
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Price and Volume (1-year)
* Qualified Person: Clinton Smyth, P. Geo., Chief Geologist of Eskay Mining Corp
* Eskay Mining Corp. has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions. All figures in C$ unless otherwise specified.
Located 70 km northwest of Stewart, B.C., in one of the world’s richest precious metal regions
Eskay Project (100% interest)
The 52,600-hectare project is located within the Golden Triangle, one of the world’s richest areas for precious metals. The project is near the Eskay Creek mine, now owned by Skeena Resources ( TSX: SKE ) . From 1994 to 2008, Eskay Creek produced 3.3 Moz of gold , and 161 Moz of silver, at exceptional grades (45 g/t Au, 2,224 g/t Ag) , with unusually low cash costs of just US$60/oz. These results highlight the potential of projects in the area, and proximity to major mines makes a successful discovery an attractive acquisition target.
Project Location and Targets Map
Source: Company
Close to several well-known projects
Just 13 km south of the old Eskay Creek mine, which Skeena Resources is turning into a new open-pit mine
The project is prospective for both VMS and porphyry copper/gold deposits, which are related and often occur in clusters; multiple deposits together can form an entire mining district or camp
Main Prospects
Source: FRC / Company
Several early-stage targets have been identified, but no independent (NI 43-101) resources have been defined yet
Targets highlighted in orange represent near-term priorities
Last year, ESK completed a satellite survey , and collected 310 rock chip and 55 channel samples to identify drill targets. The program was promising, as it returned high-grade gold, and discovered new gold areas outside previously known zones along the C10-Vermillion-TM trend.
Sample Location Map & Assay Highlights
Source: Company
Sampling has returned impressive high-grade values across multiple zones (targets); for context, gold mines globally usually have grades of 1–3 g/t
TM Zone: 0.40 m at 165 g/t gold and 285 g/t silver (channel sample); 297 g/t gold and 790 g/t silver; 106 g/t gold and 54.9 g/t silver (rock chip samples)
Vermillion Zone: 217 g/t gold and 0.44% copper; 65.7 g/t gold, 31.5 g/t silver, and 0.31% copper (rock chip samples)
Sultan Zone (new discovery): 11.2 g.t gold and 181 g/t silver (rock chip sample
Management Plans
Management is set to launch its 2026 exploration program, focusing on four main areas: Vermillion, TM, Big Red, and the new Sultan zone, all near a key geological feature that hosts major deposits in the region. The goal is to find more high-grade gold and silver, and discover new mineralized areas.
Management plans to complete a maiden resource estimate once all priority targets are tested
Preliminary Speculative Estimate (FRC Estimate)
Source: FRC
We are maintaining our preliminary, speculative estimate on the Vermillion–TM zone
We are not assigning estimates for any other project targets due to their early-stage nature
Financials
Healthy balance sheet
Source: FRC / Company
Can raise up to $2.70M through in-the-money options and warrants
FRC Projections and Valuation
*Resource – 100% of Measured and Indicated + 50% of Inferred Resources
Source: S&P Capital IQ / Various / FRC
ESK is trading at $44/oz (previously $24/oz) vs a comparables average of $110/oz (previously $105/oz)
Applying the average multiple to our speculative estimate on Eskay’s project, we arrived at a fair value estimate of $1.27/share (previously $1.21/ share
We are reiterating our BUY rating, and adjusting our fair value estimate from $ 1.21 /share to $ 1 .27/share. The recent spike in the share price reflects strong market anticipation for the upcoming drill program. We see significant exploration upside, with multiple targets showing promising potential for high-grade discoveries. We expect the stock to align with our fair value as the market recognizes the portfolio’s potential.
Risks
We believe the company is exposed to the following key risks (not exhaustive):
Maintaining our risk rating of 5 (Highly Speculative)
