Eskay Mining Corp. announced maiden drilling at Scarlet Valley, a newly identified volcanogenic massive sulfide ("VMS") center near Scarlet Ridge, part of its 100% controlled Consolidated Eskay project, British Columbia. As of this news release, the Company has completed 22,272 m of diamond core drilling, approximately 74% of the 30,000m planned to be completed in 2022.

Drill production is currently on target to reach this aggressive goal with four drills fully operational. Currently two drills are conducting step-out drilling of the Upper Stockwork Zone at TV, and two drills are beginning to define the extent of the intensely mineralized Scarlet Valley target. Preparations are underway to drill the Tarn Lake target immediately following completion of drilling at Scarlet Valley.

Maiden drilling at Scarlet Valley is underway with drill hole SV22-1 intercepting 95 m of intense sulfide mineralization and hydrothermal alteration. Recent drilling at Scarlet Ridge has intercepted a zone of intense hydrothermal alteration and replacement-style sulfide mineralization. Drilling at Scarlet Ridge and Scarlet Valley as well as recent field investigations at Scarlet Knob-Tarn Lake (Figure 1) confirms the presence of replacement-style and stockwork VMS mineralization at all locations.

Generally, sulfide mineralization is most intense proximal to east-west trending and vertically oriented basalt dikes suggesting that hydrothermal fluids exploited the same syn-volcanic structures as these dikes during their ascent to the seafloor/sub-seafloor environment. A more detailed BLEG, clay-fraction stream sediment survey utilizing LiDAR topographic data collected in 2020 has been completed over the northeastern part of the Property, including Scarlet Valley, Scarlet Knob-Tarn Lake, Scarlet Ridge, and the northern flanks of the McTagg anticlinorium. These areas all have very strong BLEG anomalies identified during the 2020 program (Figure 1).

This refined BLEG survey will allow further vectoring towards promising targets in this prolifically mineralized area. A similar detailed BLEG survey has also been completed over the 6 km trend of very strong BLEG anomalies in the vicinity of C10 and Vermillion to further refine targeting in that area. Highlights from Scarlet Valley: + Maiden drilling is underway at Scarlet Valley (Figure 2) targeting extensive surface exposures of a VMS feeder zone (Figure 3) including replacement-style sulfide mineralization.

Mineralization is hosted within rocks proximal to the contact between basalt dikes and surrounding andesite and volcaniclastic debris flows strongly suggesting the presence of syn-volcanic feeder structures. To date, 618 m have been drilled at Scarlet Valley. A second drill has recently been brought to Scarlet Valley to help define the extent of this highly prospective area before winter weather forces retreat to lower elevations; Intercepts from drill hole SV22-1 display intense mineralization and hydrothermal alteration interpreted as stockwork zone as well as sub-seafloor replacement-style mineralization within volcaniclastic debris flow breccia (Figures 4-6).

Sulfide mineralization is intense between downhole depths of 1.0-80.0 m, and 100.0-113.0 m. + Handheld XRF analyses of sulfide minerals in outcrop and drill core show consistently high concentrations of the Au pathfinder elements including Ag, As, Sb, Hg, and Zn. Handheld XRF cannot reliably measure Au concentrations; Prospecting and mapping teams have identified mineralized rock similar to that intercepted in SV22-1, extending at least 300 m eastward from the collar of this hole (Figures 2 and 3). Additional drilling will test eastward and uphill continuations of this mineralization; Geological mapping and drone imagery suggests the presence of laterally extensive horizons of replacement-style mineralization extending along strike from interpreted feeder zones.

Preliminary investigations of drill core suggest that coarse-grained debris flows with a sandy matrix (Figure 6 bottom image) serve as preferential hosts for sub-seafloor replacement-style mineralization over debris flows muddy matrix material. These observations suggest that greater porosity of coarser-grained matrix material enhances permeability of this host rock thus making it more favorably hydrothermally altered and mineralized. Identification and definition of these coarse-matrix horizons is a key omponent of current mapping efforts at Scarlet Valley; Hole SV22-1 was drilled to a depth of 618 m, under the valley floor, in order to enable three-dimensional geologic modeling of favorable horizons for replacement-style mineralization along strike.

Sporadic mineralized intervals, up to 10% sulfide content, occur throughout SV22-1, suggesting favorable horizons for replacement-style mineralization continue to the vicinity of the valley floor to the west.