The Eskay Creek deposit is generally classified as an example of a high-grade, precious metals-rich epithermal volcanogenic massive sulphide (VMS) deposit; however, it has also been suggested to be an example of a subaqueous hot spring gold–silver deposit.

Features that would classify Eskay Creek as a VMS deposit (Roth et al., 1999) include:

- Formed on the seafloor in an active volcanic environment with a rhyolite footwall and basalt hanging wall;

- Chlorite–sericite alteration in the footwall and sulphide formation within a mudstone unit at the seafloor interface.

Unlike many VMS deposits, Eskay Creek has high concentrations of gold and silver, and an associated suite of antimony, mercury and arsenic. These mineralization features, along with the high incidence of clastic sulphides and sulfosalts, are more typical of an epithermal environment with low formation temperatures.

Features that would classify Eskay Creek as a subaqueous hot spring gold–silver deposit (Alldrick, 1995) include:

- Broad hydrothermal systems marked by widespread sericite–pyrite alteration;

- Evidence of a volcanic crater or caldera setting;

- Accumulations of felsic volcanic strata.

Several distinct styles of stratiform and discordant mineralization are present at the Eskay Creek Project, defined over an area approximately 1,400 m long and as much as 300 m wide. Early exploration efforts focused on discordant-style, precious metal mineralization hosted in sulphide veins within the rhyolite, felsic intrusions, and the footwall volcanic units. Following recognition of more significant stratiform mineralization, exploration expanded further to the north, defining the 21 Zone deposits. Distinct zones have been defined by variations in location, mineralogy, texture, and precious metal grades (Edmunds et al, 1994).

Stratiform-style mineralization is hosted in black carbonaceous mudstone and sericitic tuffaceous mudstone of the Contact Mudstone (Iskut River Formation), located between the footwall Eskay Rhyolite member and the hanging wall Willow Ridge mafic unit. The stratiform hosted zones include the 21B Zone, the NEX Zone, the 21A Zone (characterized by arsenic–antimony– mercury sulphides), the 21CZone, the 21Be Zone and the 21E Zone. Stratigraphically above the Contact Mudstone mineralization, and usually above the first basaltic sill, the mudstones also host a localized body of base metal-rich, relatively precious metal-poor, massive sulphides referred to as the Hanging Wall or HW Zone.

21A Zone
The 21A Zone is a gold–silver-rich sulphide lens that sits on the western flank of a small depression at the Eskay Rhyolite-mudstone contact, located 200 m south of the 21B Zone. Stratiform-style, mudstone-hosted mineralization averages 10 m thickness, and locally up to 35m. It is approximately 240 m wide, 250 m long and is bound to the east by the Pumphouse fault. It is underlain by a discontinuous zone of intense magnesian chlorite alteration and stockwork veining in the Eskay Rhyolite.

21B Zone
The main body of mineralization, the 21B Zone, is a moderately, westward dipping, stratiform tabular body of gold–silver-rich mineralization about 700 m long, 200 m wide, and locally exceeding 20 m thick. Individual clastic sulphide beds range from 1–100 cm thick and become progressively thinner up sequence. Mineralization consists of beds of clastic sulphides and sulphosalts containing variable amounts of barite, rhyolite, and mudstone clasts. Imbricated, laminated mudstone rip-up clasts have been observed locally at the base of the clastic sulphide–sulfosalt beds, indicating turbiditic emplacement of some beds.

21C Zone
The 21C Zone is roughly 650 m long, 60–150 m wide and about 8–15 m thick. It is dominantly characterized by stratabound to stratiform barite-rich mineralization associated disseminated base and precious metal-rich mineralization in the rhyolite footwall. It occurs at the same stratigraphic horizon as the 21B Zone, but is located down-dip towards the west. The 21C is separated from the 21B zone by 40–60 m of barren Contact Mudstone.

21Be Zone
Precious-metal mineralization near the north end of the 21B Zone extends over top of the anticline into a block bound by segments of the north– south-oriented Pumphouse Fault. Mineralization is hosted within a steeply-dipping, fault-bounded slab of mudstone approximately 60–100 m wide and 500 m long that is complexly folded and faulted.

North Extension Zone (NEX) Zone
The approximately 600 m long and 150 m wide North Extension Zone is geometrically complicated by numerous faults that cut the nose of the Eskay Anticline. Textures, mineralogy, and preciousmetal grades are somewhat variable and show similar characteristics to parts of the 21Be Zone and distal parts of the 21B Zone, suggesting synchronous deposition. Pyrite and chalcopyrite are more common whereas Sb-Hg bearing minerals are less common. Chalcopyrite occurs in stringers that overprint earlier clastic mineralization and may be related to the formation of the HW Zone. Much of the contained pyrite may also have been introduced during this later event.

Open pit mining was selected for PEA purposes, based on the size of the resource, grade tenor, grade distribution and proximity to topography.

The Project is located to the south of Tom Mackay Creek. A 100 m buffer zone was kept with the river for all infrastructure, pits and waste rock storage facilities (WRSFs). The potential for underground development beneath the open pit was examined in preliminary evaluations but has not been included as part of this PEA. There is still potential for the inclusion of underground mining in future mining studies.

The mine plan is partly based on Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the PEA based on these Mineral Resources will be realized.

The Eskay Creek PEA has two pit designs: the north pit and the south pit. The north pit will have four phases with Phase 3 split into three parts for access. The south pit will be a small single-phase pit that will be mined at the end of the mine life. These pits will provide a total of 21.3 Mt of mill feed grading 3.23 g/t Au and 78 g/t Ag. Waste movement from these phases will amount to 154.0 Mt giving a strip ratio of 7.2:1 (waste:mill feed).

The phases are scheduled to provide 2.5 Mt/a of feed to the mill over a nine-year operating mine life, after two years of pre-production stripping. The pits are sequenced to minimize initial stripping and provide higher feed grades in the early years of the mine life. This is accomplished with stockpiling of lower-grade material.

The pits will be built on 8 m benches with safety berm placement each 16 m. Minimum mining widths of 35–40 m were maintained in the design. Ramps will be at 10% gradient and will vary in width from 23.3 m (single lane width) to 30.2 m (double lane width). They have been designed for 142 t haulage trucks.

The plant will process material at a rate of 2.5 Mt/a with an average head grade of 3.2 g/t Au and 78 g/t Ag to produce a flotation concentrate.

The processing plant will consist of the following areas:
- Primary crushing: a vibrating grizzly feeder and jaw crusher;
- Crushed material storage and reclaim: stockpile with two reclaimers;
- Grinding: SAG/ball mill circuit;
- Rougher flotation: rougher flotation cells;
- Regrind and cleaner flotation: fine grinding and final cleaner flotation cells;
- Concentrate dewatering and filtration: concentrate thickener and filtration;
- Concentrate load-out: storage shed to allow front-end loader filling of concentrate transportation;
- Final tailings disposal: tailings slurry pumped to TMSF.

Crushing
Run-of-mine (ROM) material will be delivered to the surface primary crusher by haul trucks from the open pit mine. The ROM material will feed a dump pocket via a stationary ........