Skeena to raise $50M for Eskay Creek gold project

Skeena Resources (TSX: SKE) of Vancouver has announced a $50-million bought deal public offering with which to advance work at its Eskay Creek gold project. The company will issue 16.1 million shares at a price of $3.10 each, and the underwriters have been granted a 15% overallotment.

The former Eskay Creek mine was the highest grade gold mine in the world when it operated from 1994 to 2008. The mine produced 3.3 million oz. of gold and 160 million oz. of silver at an average gold grade of 45 g/t gold and 2,224 g/t silver. The property is within British Columbia’s famed Golden Triangle.

Skeena released a resource estimate earlier this year for both a potential pit and underground redevelopment. The measured and indicated portion is 38.5 million tonnes grading 4.3 million tonnes grading 5.0 g/t gold and 48.6 g/t silver, containing a gold equivalent of 5.3 million oz. The inferred resource is 5.7 million tonnes grading 1.6 g/t gold and 57.0 g/t silver, containing a gold equivalent of 298,000 oz.

A preliminary economic assessment was conducted in 2019 at three different gold prices, the highest of which was US$1,500 per oz. After a capex of US$233 million to create a nine-year open pit with an average grade of 4.17 g/t gold equivalent, average annual production would be 306,000 oz. gold equivalent at an all-in sustaining cost for gold of US$615 per oz. With the US$1,500 per oz. gold price, Eskay Creek carries an after-tax net present value (5% discount) of $878 million, an after-tax internal rate of return of 63%, and a payback period of 0.9 year. Annual after-tax free cash flow is estimated at $187 million.

Visit www.SkeenaResources.com to read the company’s latest corporate presentation.