Skeena Resources (TSX, NYSE: SKE) will raise C$125 million ($90 million) for the development of its Eskay Creek gold-silver project in British Columbia, for which it is advancing permitting and targeting first production in 2027.
In a press release this week, the company announced that a syndicate of underwriters led by BMO Capital Markets will purchase on a bought-deal basis 5.21 million of its shares at C$24 each, with the option to buy an additional 15% of the offering.
Shares of Skeena fell from C$26 to the current C$24 level after the financing announcement. On Friday, the stock opened 0.4% higher at C$24.25 with a market capitalization of C$2.8 billion ($2 billion).
This offering, together with the company’s other sources of funding, should ensure sufficient liquidity to complete permitting, Skeena said, adding that it would satisfy the condition set by Orion Resource Partners to access the balance of its $750 million financing package.
Skeena secured the funding commitment from Orion in June 2024, comprising a $200 million gold stream, a $350 million loan, a $100 million equity investment and a $100 million cost over-run facility. The $200 million gold stream was released in December after Skeena received its bulk sample permit and obtained approval to begin infrastructure construction.
On the new financing, Skeena’s executive chairman Walter Coles said: “This funding provides flexibility to pursue less expensive financing alternatives compared to the existing undrawn senior secured loan facility and represents approximately 4.5% dilution to the company’s total market capitalization.”
According to a feasibility study released last year, Eskay Creek’s pre-production capital cost is estimated at C$713 million, including C$49 million for contingencies. The project, which previously operated as an underground mine from 1994 to 2008, aims to produce 320,000 oz. gold-equivalent a year from an open pit during a 12-year mine life.
As of Sept. 30, the company had cash on hand of approximately C$105 million ($75 million) to fund the project.
Permitting delays
As certain construction activities continue at Eskay Creek, Skeena warned there could be an unanticipated delay in the project’s permitting due to the ongoing BC government employee strike. The company previously said it aims to obtain all permits required for mine construction and operation by year-end.
Should all go according to plan, construction is expected to start in 2026, followed by production in the first half of the following year.
Meanwhile, Skeena said it is progressing in talks with the Tahltan Central Government regarding the project’s impact benefits agreement, and a vote for its approval will be scheduled upon once the negotiations conclude.
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Skeena Resources (TSX, NYSE: SKE) will raise C$125 million ($90 million) for the development of its Eskay Creek gold-silver project in British Columbia, for which it is advancing permitting and targeting first production in 2027.
In a press release this week, the company announced that a syndicate of underwriters led by BMO Capital Markets will purchase on a bought-deal basis 5.21 million of its shares at C$24 each, with the option to buy an additional 15% of the offering.
Shares of Skeena fell from C$26 to the current C$24 level after the financing announcement. On Friday, the stock opened 0.4% higher at C$24.25 with a market capitalization of C$2.8 billion ($2 billion).
This offering, together with the company’s other sources of funding, should ensure sufficient liquidity to complete permitting, Skeena said, adding that it would satisfy the condition set by Orion Resource Partners to access the balance of its $750 million financing package.
Skeena secured the funding commitment from Orion in June 2024, comprising a $200 million gold stream, a $350 million loan, a $100 million equity investment and a $100 million cost over-run facility. The $200 million gold stream was released in December after Skeena received its bulk sample permit and obtained approval to begin infrastructure construction.
On the new financing, Skeena’s executive chairman Walter Coles said: “This funding provides flexibility to pursue less expensive financing alternatives compared to the existing undrawn senior secured loan facility and represents approximately 4.5% dilution to the company’s total market capitalization.”
According to a feasibility study released last year, Eskay Creek’s pre-production capital cost is estimated at C$713 million, including C$49 million for contingencies. The project, which previously operated as an underground mine from 1994 to 2008, aims to produce 320,000 oz. gold-equivalent a year from an open pit during a 12-year mine life.
As of Sept. 30, the company had cash on hand of approximately C$105 million ($75 million) to fund the project.
Permitting delays
As certain construction activities continue at Eskay Creek, Skeena warned there could be an unanticipated delay in the project’s permitting due to the ongoing BC government employee strike. The company previously said it aims to obtain all permits required for mine construction and operation by year-end.
Should all go according to plan, construction is expected to start in 2026, followed by production in the first half of the following year.
Meanwhile, Skeena said it is progressing in talks with the Tahltan Central Government regarding the project’s impact benefits agreement, and a vote for its approval will be scheduled upon once the negotiations conclude.