The Golden Triangle
In a hidden corner of Northwestern Canada lies some of the world’s most significant mineral potential.
Billions of dollars of undiscovered gold, silver, and copper still sit within an unexplored area that was once remote. However, only now can these world-class deposits be finally tapped.
Skeena Resources has generously helped us to put together the story of the famed Golden Triangle.
The History of the Golden Triangle
Even before Canada was officially a country, the area now known as the Golden Triangle was a hub for prospectors looking to strike it rich.
In 1861, Alexander “Buck” Choquette struck gold at the confluence of the Stikine and Anuk Rivers, kickstarting the Stikine Gold Rush. More than 800 prospectors left Victoria to go to the Stikine in search of gold.
A few short years later, an even more significant rush would occur just to the north in the Cassiar region – it’s where British Columbia’s biggest ever gold nugget, weighing in at 73 ounces, would be found. The Atlin Gold Rush, an offshoot of the world-famous Klondike Gold Rush, would also occur just north of the Triangle.
The First Discoveries
The companies that first worked in the Golden Triangle balanced its richness against the costs of its remote location.
1. Premier Gold Mine
The first big discovery in the Golden Triangle was at the Premier Gold Mine, which started operations in 1918.
The company that first owned it, Premier Gold Mining Company, returned as much as 200% on the stock market between 1921 and 1923. At the time the Christian Science Monitor called it “One of the greatest silver and gold mines in the world.”
2. Snip Mine
Discovered in 1964 by Cominco, the deposit stayed dormant until 1986, when it was drilled in a joint venture with Delaware Resources. Murray Pezim’s Prime Resources bought out Delaware after the stock ran from a dollar to $28 a share.
The high-grade Snip mine produced approximately one million ounces of gold from 1991 until 1999 at an average gold grade of 27.5 g/t.
3. Eskay Creek
In 1988, after a 109 drill holes, tiny exploration companies Stikine Resources and Calpine Resources finally hit the hole they needed at Eskay Creek: 27.2 g/t Au and 30.2 g/t Ag over 208m.
Eskay would go on to become Canada’s highest-grade gold mine and the world’s fifth largest silver producer, with production well in excess of 3 million ounces of gold and 160 million ounces of silver.
Gold: 49 g/t
Silver: 2,406 g/t
By the time it was all said and done, the stock price of Stikine Resources would go from $1 to $67, after it was bought by International Corona.
Why did these three rich mines shut down?
Despite the gold in the Triangle being extremely high grade, lower gold prices in the late 90s made the economics challenging. Meanwhile, the lack of infrastructure in this remote area of Canada meant that power, labor, and logistics costs were sky high.
Both of these things have changed today, and activity at the Golden Triangle is now fast and furious.
Gaining Access to the Triangle
The Golden Triangle is a hot area for exploration again. This is for three main reasons: higher gold prices, new infrastructure, and modern discoveries.
Higher gold prices
Average gold price (1999): $279 (Adjusted for inflation: $398)
Average gold price (2016): $1202
Gold prices are more than 3x as high today, even after adjusting for inflation. Combined with the Golden Triangle’s high grades, this becomes even more attractive.
Today, road access to the area is easier than ever, and a new transmission line will dramatically reduce the cost of power for companies operating in the Triangle.
- Completion of a $700 million high-voltage transmission line to the Golden Triangle. The Northwest Transmission Line goes 335km from Terrace to Bob Quinn Lake, and north to the Red Chris mine
- Paving of the Stewart-Cassiar highway north from Smithers (Hwy 37)
- Opening of ocean port facilities for export of concentrate in Stewart
- Completion of a three dam, 277 MW hydroelectric facility located 70km northwest of Stewart
With new infrastructure in tow, the Golden Triangle is now open for business.
The next gold rush at the Golden Triangle has already started.
Just some of the new discoveries in the area include Seabridge’s KSM project, Pretium’s Valley of the Kings deposit, and Imperial Metal’s Red Chris mine.
Yet, despite this track record of new discoveries and mines being built in the area, a British Columbia government report estimates that only 0.0006% of the Golden Triangle has been mined to date.
The Silver Series: The Start of A New Gold-Silver Cycle (Part 1 of 3)
As the decade-long bull run shows signs of slowing, is it time for precious metals to shine? Here’s why it could be the start of a new gold-silver cycle.
The world has experienced a decade of growth fueled by record-low interest rates, a burgeoning money supply, and historic debt levels – but the good times only last so long.
As the global economy slows and eventually begins to retract, can precious metals offer a useful store of value to investors?
Part 1: The Start of a New Cycle
Today’s infographic comes to us from Endeavour Silver, and it outlines some key indicators that precede a coming gold-silver cycle in which exposure to hard assets may help to protect wealth.
Bankers Blowing Bubbles
Since 2008, central bankers around the world launched a historic market intervention by printing money and bailing out major banks. With cheap and abundant money, this strategy worked so well that it created a bull market in every sector — except for precious metals.
Stock markets, consumer lending, and property values surged. Meanwhile, the U.S. Federal Reserve’s assets ballooned, and so did corporate, government, and household debt. By 2018, total debt reached almost $250 trillion worldwide.
Currency vs. Precious Metals
The world awash in unprecedented amounts of currency, and these dollars chase a limited supply of goods. Historically speaking, it’s only a matter of time before the price of goods increases or inflates – eroding the purchasing power of every dollar.
Gold and silver are some of the only assets unaffected by inflation, retaining their value.
Gold and silver are money… everything else is credit.
– J.P. Morgan
The Perfect Story for a Gold-Silver Cycle?
Investors can use several indicators to gauge the beginning of the gold-silver cycle:
- Gold/Silver Futures
Most traders do not trade physical gold and silver, but paper contracts with the promise to buy at a future price. Every week, U.S. commodity exchanges publish the Commitment of Traders “COT” report. This report summarizes the positions (long/short) of traders for a particular commodity.
Typically, speculators are long and commercial traders are short the price of gold and silver. However, when speculators and commercial traders positions reach near zero, there is usually a big upswing in the price of silver.
- Gold-to-Silver Ratio Compression
As the difference between gold and silver prices decreases (i.e. the compression of the ratio), history suggests silver prices can make big moves upwards in price. The gold-to-silver ratio compression is now at high levels and may eventually revert to its long-term average, which implies a strong movement in prices is imminent for silver.
- Scarcity: Declining Silver Production
Silver production has been declining despite its growing importance as a safe haven hedge, as well as its use in industrial applications and renewable technologies.
- The Silver Exception
Silver is not just for coins, bars, jewelry and the family silverware. It stands out from gold with its practical industrial uses which account for 56.1% of its annual consumption. Silver will continue to be a critical material in solar technology. While photovoltaics currently account for 8% of annual silver consumption, this is set to change with the dramatic increase in the use of solar technologies.
The Price of Gold and Silver
Forecasting the exact price of gold and silver is not a science, but there are clear signs that point to the direction their prices will head. The prices of gold and silver do not accurately reflect a world awash with cheap and easy money, but now may be their time to shine.
Don’t miss another part of the Silver Series by connecting with Visual Capitalist.
Why Gold is Money: A Periodic Perspective
Gold has been used as money for millennia. People often attribute this to beauty, but there are basic physical properties for why gold is money.
Why Gold is Money
The economist John Maynard Keynes famously called gold a “barbarous relic”, suggesting that its usefulness as money is an artifact of the past. In an era filled with cashless transactions and hundreds of cryptocurrencies, this statement seems truer today than in Keynes’ time.
However, gold also possesses elemental properties that has made it an ideal metal for money throughout history.
Sanat Kumar, a chemical engineer from Columbia University, broke down the periodic table to show why gold has been used as a monetary metal for thousands of years.
The Periodic Table
The periodic table organizes 118 elements in rows by increasing atomic number (periods) and columns (groups) with similar electron configurations.
Just as in today’s animation, let’s apply the process of elimination to the periodic table to see why gold is money:
- Gases and Liquids
Noble gases (such as argon and helium), as well as elements such as hydrogen, nitrogen, oxygen, fluorine and chlorine are gaseous at room temperature and standard pressure. Meanwhile, mercury and bromine are liquids. As a form of money, these are implausible and impractical.
- Lanthanides and Actinides
Next, lanthanides and actinides are both generally elements that can decay and become radioactive. If you were to carry these around in your pocket they could irradiate or poison you.
- Alkali and Alkaline-Earth Metals
Alkali and alkaline earth metals are located on the left-hand side of the periodic table, and are highly reactive at standard pressure and room temperature. Some can even burst into flames.
- Transition, Post Transition Metals, and Metalloids
There are about 30 elements that are solid, nonflammable, and nontoxic. For an element to be used as money it needs to be rare, but not too rare. Nickel and copper, for example, are found throughout the Earth’s crust in relative abundance.
- Super Rare and Synthetic Elements
Osmium only exists in the Earth’s crust from meteorites. Meanwhile, synthetic elements such as rutherfordium and nihonium must be created in a laboratory.
Once the above elements are eliminated, there are only five precious metals left: platinum, palladium, rhodium, silver and gold. People have used silver as money, but it tarnishes over time. Rhodium and palladium are more recent discoveries, with limited historical uses.
Platinum and gold are the remaining elements. Platinum’s extremely high melting point would require a furnace of the Gods to melt back in ancient times, making it impractical. This leaves us with gold. It melts at a lower temperature and is malleable, making it easy to work with.
Gold as Money
Gold does not dissipate into the atmosphere, it does not burst into flames, and it does not poison or irradiate the holder. It is rare enough to make it difficult to overproduce and malleable to mint into coins, bars, and bricks. Civilizations have consistently used gold as a material of value.
Perhaps modern societies would be well-served by looking at the properties of gold, to see why it has served as money for millennia, especially when someone’s wealth could disappear in a click.
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