Skeena Resources (TSX: SKE) has evidently made a “quick-flip” out of a royalty on its flagship Eskay Creek Project, found in British Columbia. The firm has re-sold a royalty, months after re-purchasing it from Barrick Gold (TSX: ABX).
The company has closed on the sale of a 0.5% net smelter returns royalty to that of Franco-Nevada (TSX: FNV). The NSR was issued in connection with the granting of a right of first refusal in 2021 for the royalty, which accompanied a $30.9 million strategic investment made by Franco-Nevada via a flow-through financing at $21.00 a share.
The 0.5% NSR was sold for $27 million in closing cash consideration, and a contingent cash consideration of $1.5 million.
The sale effectively returns outstanding royalties on the Eskay Creek project to 1.00%. In September, Skeena had repurchased a 0.5% NSR from Barrick Gold for $17.5 million, with Barrick still holding a 0.5% royalty on the project. The subsequent sale to Franco-Nevada effectively resulted in the company flipping a royalty on its own project, making $9.5 million in the process based on the closing cash consideration figure.
Proceeds from the transaction are expected to be used for further exploration and development of the Eskay Creek project, as well as for general administration and corporate purposes.
Skeena Resources last traded at $7.21 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.