Skeena Resources seals Essay Creek royalty sale to Franco Nevada

Staff Writer | January 3, 2023 | 5:52 am News Canada Gold Silver 
Skeena Resources seals Essay Creek royalty sale to Franco Nevada
Eskay Creek was the highest-grade gold mine in the world when in production, between 1994 and 2008. (Image courtesy of Skeena Resources.)

Canadian explorer and developer Skeena Resources (TSX, NYSE: SKE) said on Tuesday it had closed the sale of a 0.5% net smelter returns royalty (NSR) on its Eskay Creek gold-silver project to Franco-Nevada (TSX, NYSE: FNV) in a deal worth C$27 million cash ($20m).

The transaction, first announced in early December, also gives Skeena an additional cash consideration of C$1.5 million ($1.1m).

Net proceeds of the sale will be used mainly to fund exploration and development activities at Eskay Creek, which the company acquired from Barrick Gold in 2020. 

The British Columbia-focused company feasibility study for Eskay Creek envisions an open pit operation with an annual production of 352,000 ounces of gold equivalent a year.

Average grades are pegged at 4.57 g/t gold-equivalent, while the after-tax net present value, at a 5% discount, is estimated at C$1.4 billion, with a 56% internal rate of return and a 1.4-year payback at $1,550/oz gold.

The past-producing Eskay Creek mine was the world’s highest-grade gold operation between 1994 and 2008.

For more information, visit www.SkeenaResources.com.

THIS ARTICLE WAS WRITTEN FOR MINING.COM

1 0

Mining.com Recommends

More Canada News