Mining

Skeena to raise C$50M for Eskay Creek gold project

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 $1,500 per ounce.

After a capex of $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 $615 per ounce.

With the $1,500/oz. gold price Eskay Creek carries an after tax net present value (5% discount) of C$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 C$187 million.

(This article first appeared in The Northern Miner)

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