Skeena’s Eskay Creek bulk sample permit unlocks US$200M in gold project funding

Skeena Resources (TSX: SKE; NYSE: SKE) can proceed with a 10,000-tonne bulk sample and infrastructure construction at its Eskay Creek gold project in northwestern British Columbia under a new permit that also triggers the release of US$200 million in funding.

The bulk sample permit from the B.C. Ministry of Mining and Critical Minerals marks “a major milestone” and grants the authorization for planned development at the project next year, Skeena Executive Chairman Walter Coles said.

“It is also significant because it is a key condition precedent for the release of US$200 million in gold stream project funding from Orion Resource Partners,” he said in a statement Monday.

Skeena’s US$750-million deal with Orion features the US$200-million gold stream, along with a US$350-million loan, US$100-million equity investment and a US$100-million cost over-run facility. Skeena received an initial US$5-million tranche of the gold stream in June.

In Toronto, shares of Skeena Resources jumped 47¢ or 3.6% on news of the permit and closed at $13.52 per share on Monday. The stock slipped 2.4% to $13.20 mid-Tuesday as wider markets fell. The company has a market value of $1.4 billion.

BMO has a price target on the stock of $22 per share.

“We expect continued progress will reward shareholders,” BMO’s precious metals analyst Andrew Mikitchook commented in a research note to clients. “In our opinion, these individual milestones are key deliverables to maintain and build momentum for permitting and re-developing the Eskay gold/silver mine.”

Indigenous consultation

The bulk sample application has been the subject of consultation with local indigenous groups and communities. Additional work, including environmental baseline monitoring, engineering design, and safety and reclamation studies, has been completed to support the bulk sample program, Skeena said.

The Eskay Creek project is host to what used to be one of the world’s highest-grade gold mines. Skeena’s aim is to bring back the former underground mine, which operated from 1994 to 2008, as an open pit with a target start date of 2027. Over an estimated 12-year life, it would produce 320,000 oz. of gold-equivalent annually.

Over the next 12 months, Skeena is expected to continue advancing Eskay Creek through B.C.’s environmental assessment process, in close collaboration with its Tahltan First Nation partners.

Environmental permits

Following the company’s initial environmental assessment application submission in mid-August 2024, the project has formally commenced the 180-day legislated application review process under the B.C. Environmental Assessment Act.

Skeena is currently receiving and responding to comments from the technical advisory committee, which includes participation from indigenous groups and regulatory agencies. It is also in the process of gathering and responding to feedback from local community members and stakeholders during the public consultation period.

Input from this phase of the review process will inform the final environmental assessment application submission, which the company expects to submit late in first quarter 2025.

Skeena’s management had envisioned to secure its environmental assessment certificate, the Mines Act permit and a construction permit all by the end of next year.