The gold-bearing black sands of northeast Graham Island have been known since 1877. The Blue Jacket Creek sands are located 1.6 kilometres south of Masset, on Masset Sound.

In 1923 a gold-washing plant with a capacity of 30 yards per hour was installed; values were estimated at 80 cents per yard. Registered in 1924, P.B.C. Mines Co., with a capital of $759,000 held 7 hydraulic leases. The company carried out placer operations from March to October and conducted concentration and fire assay tests to determine average gold content. Graham Island Mining Co., Limited was incorporated in 1926 to acquire 5 leases covering an area of 2286 by 5791 metres of beach. A 10 ton chemical testing plant was installed on the property. From a 48 ton sample, sorted from 72 tons of sand from various pits in the area, a recovery of $76 in gold or $1.06 a ton was obtained. By 1928, the company had dug and sampled 56 test pits; the best sample assayed 0.6 ounces of gold and 2 ounces of platinum per ton.

Mogul Mining Corporation Limited in about 1956 acquired placer mining leases covering about 17 square kilometres. In June 1957 Lexindin Gold Mines, Limited, acquired from Mogul a 65 per cent interest in the property. Beach sand and cyanide tailings samples were sent to the Mines Branch, Ottawa in December 1956 and June 1957. A sample of concentrates returned 20.6 grams per tonne gold and 68.6 grams per tonne platinum (Annual Report 1929).

Pleistocene to Recent deposits of unconsolidated to semi- consolidated sands, clays, sandy clays, gravels, conglomerates, and a basal blue-grey glacial clay overlie Tertiary Skonun Formation.

Black sand deposits have a lenticular and varying distribution along the base of bordering beach-bluffs. The black sands, derived from the erosion of the bluffs and subsequent concentration by wave and wind action, contain magnetite, titaniferous-hematite, ilmenite, rutile, zircon, gold, and platinum.

The black sands occur in lenses 2 to 30 centimetres thick, 6 metres wide and 152 metres long. A sample of the beach sands assayed 23.9 per cent magnetite, 38.8 per cent hematite and ilmenite, 15.0 per cent garnet, 11.2 per cent quartz and feldspar, 3.6 per cent altered silicates, 3.0 per cent hornblende, 2.0 per cent epidote, 1.2 per cent zircon, 0.9 per cent staurolite, 0.3 per cent titanite, and 0.1 per cent rutile (Economic Geology Report 25).