Skeena Resources Limited (TSX: SKE) released the findings of a recently conducted feasibility study for its Eskay Creek Gold-Silver Project. This property, exclusively owned by Skeena, is strategically located in Tahltan Territory, nestled within the Golden Triangle of northwest British Columbia.
Among the key highlights emerging from the study is an after-tax net present value (NPV) of $2.0 billion. This valuation is based on a scenario assuming base case prices of US$1,800 gold and US$23 silver, showcasing an after-tax internal rate of return (IRR) of 43%. Furthermore, the study indicates an after-tax payback period of 1.2 years on pre-production capital expenditures (CAPEX).
The life of mine all-in sustaining cost (AISC) is estimated at US$684 per ounce of gold equivalent sold, providing a foundation for sustainable operational viability.
Proven and probable mineral reserves earmarked for open-pit mining stand at 39.8 million tonnes. This reserve contains 3.3 million ounces of gold and 88.0 million ounces of silver, contributing to a cumulative 4.6 million ounces of gold equivalent.
In terms of production projections, the Eskay Creek project anticipates an average annual production of 455,000 ounces over the first five years, characterized by a grade of 5.5 grams per tonne gold equivalent. This phase is also expected to yield an average after-tax free cash flow of $474 million annually.
Looking ahead to the initial ten years, the project foresees an average annual production of 370,000 ounces at 4.2 grams per tonne gold equivalent, accompanied by an average after-tax free cash flow of $365 million per annum.
The estimated pre-production CAPEX is $713 million, representing a compelling after-tax NPV:CAPEX ratio of 2.8:1, underscoring the economic viability of the project.
Skeena Resources last traded at $5.00 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.