In the resource-rich heart of British Columbia’s Golden Triangle, Skeena Gold & Silver is rapidly revitalising Eskay Creek, once the world’s highest-grade gold mine.
Skeena’s well-timed renaissance comes as gold and silver prices remain elevated, and investors are seeking miners with teir-one credentials. The company has established a strong working relationship with the Tahltan Nation, the storied mining region’s Indigenous community, and is now moving forward with full scale construction.
The company is poised for a major rerating as it eyes first production next year at Eskay Creek, which is set to become one of the lowest-cost, highest-grade open-pit gold mines globally.
Skeena achieved a major derisking milestone in February when it completed the permitting process for Eskay Creek, receiving all the required permits for construction, including environmental approval that was jointly signed off by the Tahltan Central Government.
Construction was more than 50% complete at the time of writing and the company is on track for initial production in the second quarter of 2027 with projected annual revenue of C$2.1 billion (at current approximate spot prices of $4,300/oz gold and $68/oz silver).
It’s been a rapid but carefully planned path for Skeena, which commenced work on Eskay Creek in 2017 when it originally entered into the agreement with a global mining major, Barrick Mining.
The former high-grade underground operation previously produced 3.3 million ounces of gold and 160Moz of silver at average grades of 45g/t gold and 2,224g/t silver. Under Barrick’s ownership, it was the highest-grade gold mine globally and was placed on care and maintenance in 2008.
Skeena recognised the significant potential of Eskay Creek and undertook more than 200,000m of drilling and completed multiple technical studies that transformed the project into a robust open-pit mining operation. With access to nearby hydroelectric infrastructure providing low-cost, renewable energy, Eskay Creek is positioned as a low-cost producer with a fully financed and clearly defined path to production.
Eskay Creek is expected to produce an average of 450,000oz gold-equivalent at an average grade of 5.5g/t annually (in the first five years of production), with projected life of mine all-in sustaining costs of US$687/oz gold-equivalent, according to a 2023 definitive feasibility study.
Exceptional economics
Skeena is also breaking new ground on the economic front.
The DFS outlined payback in 1.2 years, an internal rate of return of 43% and an after-tax net present value (5%) of C$2 billion – impressive enough – but this was based on an US$1,800/oz gold price and $23/oz for silver.
Using spot prices this month of $4,300/oz and $68/oz respectively, these metrics leap to payback within 8 months, an IRR of a staggering 99% and an after-tax NPV of C$7.8 billion. Interestingly enough, the market capitalisation of the company today is approximately only half of that, further validating the upside potential of the shares.
Eskay Creek’s exceptional economics have allowed Skeena to complete a comprehensive refinancing strategy, which executive chairman Walter Coles said was another example of Skeena redefining what was possible in the mining industry.
The company announced a US$750 million offering of 8.5% senior secured notes in April to refinance development and fund a partial buyback of the existing gold stream on the project.
“As the first pre-revenue-generating company to issue a public high-yield bond, we’ve demonstrated the market’s confidence in the exceptional future cash-flow profile of Eskay Creek,” Coles said.
Silver lining
Eskay Creek’s gold credentials give the project world-class grade and scale, with a proven and probable reserve of 4.6Moz at 3.6g/t gold-equivalent.
But its significant silver component will also establish Eskay Creek as Canada’s largest silver mine.
It’s set to produce 9.5Moz of silver annually in the first five years of operation, from an 88Moz reserve grading 68.7g/t silver, positioning it in the top quartile of global primary silver producers.
The project also benefits from existing infrastructure, all-weather access roads, proximity to a new power transmission line, the nearby hydroelectric facility and port access 250km away.
Skeena struck an agreement with Coast Mountain Hydro last year, allowing the company to tie-in to the BC hydro grid and secure industrial electricity rates of about C$0.06/kWh, which will lower operating costs and emissions compared with the global mining industry standard.
Under the deal, Skeena will build a substation but will not need to construct a transmission line to connect to BC’s grid.
Snip adds upside
Beyond Eskay Creek, Skeena’s ace up its sleeve is another former Barrick asset: its 100%-owned Snip gold mine, which previously produced 1.1Moz grading 27.5g/t.
Snip lies about 40km west of Eskay Creek and presents a satellite deposit opportunity to bolster the second half of Eskay Creek’s production profile.
Snip currently hosts an indicated resource of 823,000oz grading 9.35g/t gold and an inferred 114,000oz grading 7.1g/t, according to a 2023 resource update.
None of this gold has been included in the current economics for Eskay Creek.
Incorporating Snip’s high-grade ounces is an upcoming catalyst for Skeena and is set to be revealed in an updated economic study, slated for the fourth quarter of 2026.
The optimisation study is focused on integrating Snip into the mine plan, along with an optimised pit design at Eskay Creek, and is expected to improve economics and production in the later years of the mine life.
As Skeena transitions from developer to producer, investors would be hard-pressed to find a similar project in the development pipeline with additional future potential.
“We’re ready and well positioned to take Skeena to new heights,” Coles said.
“It’s been a remarkable journey to date, and we’re not done yet. We’re excited to continue making mining history.”
ABOUT THIS COMPANY
Skeena Gold + Silver
Skeena Gold & Silver is a Canadian mining company that is leading the next generation of gold and silver development in the Golden Triangle of British Columbia, Canada, a world-renowned mining jurisdiction located in the province’s northwest.
Skeena was born of the belief that a mining company can be a positive force in society. By being thoughtful and forward-thinking, we strive to create value for all stakeholders and contribute to a better world.
EMAIL: [email protected]
WEB: https://skeenagoldsilver.com/
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LinkedIn: https://www.linkedin.com/company/%20skeena-gold-silver/
DIRECTORS: Walter Coles, Randy Reichert, Craig Parry, Suki Gill, Greg Beard, Nathalie Sajous, Hansjoerg Plaggemars
MAJOR SHAREHOLDERS: Helikon Investments 12.8%, Deutsche Balaton AG 8.8%, KGH Ltd 5.2%, Van Eck 3.6%, Vanguard Group 3.3%
QUOTED SHARES ON ISSUE (TSX: SKE): 124 million
MARKET CAP (at June 9, 2026):CAD$4.4 billion