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Three seconds to explode. Randy Reichert, President and Chief Executive Officer of Skeena Resources (TSX: SKE; NYSE: SKE), focuses on the countdown playing on the radio. The ground shakes, rises and the mountain exhales with a deep rumble.
The detonation at Skeena’s Eskay Creek project, located in the rugged terrain of British Columbia’s Golden Triangle, is part of the first structural paintings of what will be the main well. The company is spending C$713 million to reactivate one of the world’s highest-grade former gold mines until 2027, with an initial mine life of 12 years.
“Each explosion is one more step toward knowing the full potential of Eskay Creek,” Reichert told the Northern Miner on a tour of the site in late July. “It’s not just about moving rock; It is about laying the foundations for the next bankruptcy in the history of this mythical mine.
Skeena secured C$1 billion in financing from Orion Resource Partners in June, spurring the mine’s return to production. The agreement, which covers all pre-production investments, includes an equity investment, a gold flow, a senior secured loan and a charge-back facility. This is notable given that leases are still being finalized, Reichert noted.
Skeena is finalizing initial paintings and engineering plans, with the goal of concluding an impact-benefit agreement with the Tahltan First Nation government in early 2025. The company plans to download the environmental assessment certificate, the permit under the Mining Law and a structural agreement through the end of next year. Array said Reichert. Se construction is expected to begin in 2026 and production to continue in the first part of 2027.
“We have been diligent in our technique for granting permits, collaborating heavily with regulators and local communities,” he said. “By anticipating potential obstacles and overcoming them temporarily, we lessen the threat that accompanies projects of this scale. »
The Eskay Creek redevelopment is one of two major Golden Triangle projects advancing through permitting, in addition to Seabridge Gold (TSX: SEA; NYSE: SAKSM), which recently reached a licensing milestone. The region more or less borders the towns of Stewart to the west. , Lake Dease to the north and the junction of the Skeena and Stikine rivers to the south, have traditionally produced around 130 million ounces of gold.
The Eskay Creek project, an underground mine that operated from 1994 to 2008, is expected to produce 320,000 ounces of gold equivalent per year from a throughput of 9,000 tonnes per day at an open-pit mine, according to a November 2023 feasibility study. .
The study shows a net after-tax supply cost of C$2 billion at a reduction rate of 5% and an internal rate of return of 43%, on a gold value of $1,800 per ounce. and silver at $23 an ounce. Payback over the period is expected to be 1. 2 years, with total sustaining costs over the life of the mine of $687 per ounce.
Eskay Creek’s shown and probable reserves include 39. 8 million tonnes grading 2. 5 grams of gold per tonne and 68. 7 grams of silver per tonne (3. 6 grams of gold equivalent), containing approximately 33 million ounces of gold and 88 million ounces of silver. Measured and indicated resources Totaling 50. 1 million tonnes at 2. 6 grams gold and 63 grams silver (3. 4 grams gold equivalent), at 4. 1 million ounces gold and 101. 4 million ounces silver.
Last month, a Federal Court ruling upheld Skeena’s tailings control plan, allowing the company to continue with the tailings deposit on the domain near Lake Albino and constituting a risk to production. Environmental groups have opposed the project, raising ecological concerns and fears of affecting local water bodies.
Meanwhile, early works at Eskay Creek are progressing under a 10,000 tonne bulk sampling permit, preparing for infrastructure and heavy machinery development.
At the site, initial fieldwork underway is critical, Reichert said, not only for ongoing operations but also for long-term exploration. These come with studies on reinforcing the pit walls to temporarily obtain more high-grade ore and reading the deep porphyry prospect at the end. by KSP property.
The scale also included key sites such as the plant site, open pits, tailings control facilities, waste rock storage areas, sites for camps and infrastructure, roads, force facilities, and water control facilities.
Skeena’s shares gained 50% this year until July 11, when he announced the financing package. Its shares were trading at C$8. 60 on Tuesday, after touching C$4. 20 and C$9. 69 over the past 12 months. Skeena has a market capitalization of C$880. 8 million. ($638 million).
Silver represents approximately two-thirds of Eskay Creek’s total mineral content, positioning the project as one of the top five most sensible silver growth stories in recent years worldwide.
Although primarily a gold mine, the silver component of Eskay Creek’s resources contributes to Skeena’s history. Orion’s gold does not add to the silver component, giving Skeena full access to the precious metal’s bull run, which has risen 24% over the past 12 months to $2,282. 24 per ounce. Tuesday.
“Cash is the wild card at Eskay Creek,” Reichert said. “With favourable market conditions, it has the potential to particularly increase the profitability of the project, which makes it an even more interesting asset. “