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.
- 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.”
- 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.
- 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. Grades: Gold: 49 g/t Silver: 2,406 g/t Lead: 3.2% Zinc: 5.2% 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. New Infrastructure: 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. Recent improvements:
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. Modern Discoveries 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.
on Did you know that nearly one-fifth of all the gold ever mined is held by central banks? Besides investors and jewelry consumers, central banks are a major source of gold demand. In fact, in 2022, central banks snapped up gold at the fastest pace since 1967. However, the record gold purchases of 2022 are in stark contrast to the 1990s and early 2000s, when central banks were net sellers of gold. The above infographic uses data from the World Gold Council to show 30 years of central bank gold demand, highlighting how official attitudes toward gold have changed in the last 30 years.
Why Do Central Banks Buy Gold?
Gold plays an important role in the financial reserves of numerous nations. Here are three of the reasons why central banks hold gold:
Balancing foreign exchange reserves Central banks have long held gold as part of their reserves to manage risk from currency holdings and to promote stability during economic turmoil. Hedging against fiat currencies Gold offers a hedge against the eroding purchasing power of currencies (mainly the U.S. dollar) due to inflation. Diversifying portfolios Gold has an inverse correlation with the U.S. dollar. When the dollar falls in value, gold prices tend to rise, protecting central banks from volatility. The Switch from Selling to Buying In the 1990s and early 2000s, central banks were net sellers of gold. There were several reasons behind the selling, including good macroeconomic conditions and a downward trend in gold prices. Due to strong economic growth, gold’s safe-haven properties were less valuable, and low returns made it unattractive as an investment. Central bank attitudes toward gold started changing following the 1997 Asian financial crisis and then later, the 2007–08 financial crisis. Since 2010, central banks have been net buyers of gold on an annual basis. Here’s a look at the 10 largest official buyers of gold from the end of 1999 to end of 2021: Rank CountryAmount of Gold Bought (tonnes)% of All Buying #1🇷🇺 Russia 1,88828% #2🇨🇳 China 1,55223% #3🇹🇷 Türkiye 5418% #4🇮🇳 India 3956% #5🇰🇿 Kazakhstan 3455% #6🇺🇿 Uzbekistan 3115% #7🇸🇦 Saudi Arabia 1803% #8🇹🇭 Thailand 1682% #9🇵🇱 Poland1282% #10🇲🇽 Mexico 1152% Total5,62384% Source: IMF The top 10 official buyers of gold between end-1999 and end-2021 represent 84% of all the gold bought by central banks during this period. Russia and China—arguably the United States’ top geopolitical rivals—have been the largest gold buyers over the last two decades. Russia, in particular, accelerated its gold purchases after being hit by Western sanctions following its annexation of Crimea in 2014. Interestingly, the majority of nations on the above list are emerging economies. These countries have likely been stockpiling gold to hedge against financial and geopolitical risks affecting currencies, primarily the U.S. dollar. Meanwhile, European nations including Switzerland, France, Netherlands, and the UK were the largest sellers of gold between 1999 and 2021, under the Central Bank Gold Agreement (CBGA) framework. Which Central Banks Bought Gold in 2022? In 2022, central banks bought a record 1,136 tonnes of gold, worth around $70 billion. Country2022 Gold Purchases (tonnes)% of Total 🇹🇷 Türkiye14813% 🇨🇳 China 625% 🇪🇬 Egypt 474% 🇶🇦 Qatar333% 🇮🇶 Iraq 343% 🇮🇳 India 333% 🇦🇪 UAE 252% 🇰🇬 Kyrgyzstan 61% 🇹🇯 Tajikistan 40.4% 🇪🇨 Ecuador 30.3% 🌍 Unreported 74165% Total1,136100% Türkiye, experiencing 86% year-over-year inflation as of October 2022, was the largest buyer, adding 148 tonnes to its reserves. China continued its gold-buying spree with 62 tonnes added in the months of November and December, amid rising geopolitical tensions with the United States. Overall, emerging markets continued the trend that started in the 2000s, accounting for the bulk of gold purchases. Meanwhile, a significant two-thirds, or 741 tonnes of official gold purchases were unreported in 2022. According to analysts, unreported gold purchases are likely to have come from countries like China and Russia, who are looking to de-dollarize global trade to circumvent Western sanctions.
There were several reasons behind the selling, including good macroeconomic conditions and a downward trend in gold prices. Due to strong economic growth, gold’s safe-haven properties were less valuable, and low returns made it unattractive as an investment.
Central bank attitudes toward gold started changing following the 1997 Asian financial crisis and then later, the 2007–08 financial crisis. Since 2010, central banks have been net buyers of gold on an annual basis.
Here’s a look at the 10 largest official buyers of gold from the end of 1999 to end of 2021:
Source: IMF
The top 10 official buyers of gold between end-1999 and end-2021 represent 84% of all the gold bought by central banks during this period.
Russia and China—arguably the United States’ top geopolitical rivals—have been the largest gold buyers over the last two decades. Russia, in particular, accelerated its gold purchases after being hit by Western sanctions following its annexation of Crimea in 2014.
Interestingly, the majority of nations on the above list are emerging economies. These countries have likely been stockpiling gold to hedge against financial and geopolitical risks affecting currencies, primarily the U.S. dollar.
Meanwhile, European nations including Switzerland, France, Netherlands, and the UK were the largest sellers of gold between 1999 and 2021, under the Central Bank Gold Agreement (CBGA) framework.
Which Central Banks Bought Gold in 2022?
In 2022, central banks bought a record 1,136 tonnes of gold, worth around $70 billion. Türkiye, experiencing 86% year-over-year inflation as of October 2022, was the largest buyer, adding 148 tonnes to its reserves. China continued its gold-buying spree with 62 tonnes added in the months of November and December, amid rising geopolitical tensions with the United States. Overall, emerging markets continued the trend that started in the 2000s, accounting for the bulk of gold purchases. Meanwhile, a significant two-thirds, or 741 tonnes of official gold purchases were unreported in 2022. According to analysts, unreported gold purchases are likely to have come from countries like China and Russia, who are looking to de-dollarize global trade to circumvent Western sanctions.
