Skeena beefs up Eskay Creek resource ahead of Q4 feasibility

Skeena Resources’ (TSX: SKE, NYSE: SKE) latest resource update could add a year of mine life to its Eskay Creek gold-silver project in northwest British Columbia ahead of a feasibility study expected before the end of the year.

The update, announced in a Tuesday release, saw the total pit constrained measured and indicated resources rise to 50.1 million tonnes grading 3.47 grams gold equivalent per tonne for 5.5 million gold-equivalent oz., from 46.5 million tonnes grading 3.5 grams gold for 5.1 million gold-equivalent ounces.

Contained metal now totals 4.1 million oz. gold at a grade of 2.57 grams gold per tonne, and 102.5 million oz. silver at a grade of 63.63 grams.

“We are very pleased with the continued resource growth at Eskay Creek,” said Skeena president and CEO Randy Reichart. “We successfully converted a significant amount of indicated resources to the measured category, increasing our confidence in the deposit. Given most of the resources included in this update are within the measured and indicated categories, we expect a large percentage to convert to reserves, potentially adding a year or more of mine life to the Q4 2023 definitive feasibility study.”

The gold equivalent resource has increased by 23% in the measured category and now comprises 73% of the total pit constrained resource, up from 63% in the previous estimate in 2022, Skeena said.

The inferred resource decreased to 643,000 tonnes from 3.4 million tonnes, with contained gold now totaling 30,000 oz. grading 1.46 grams gold and silver at 668,000 oz. at a grade of 32.33 grams silver.

The update was based on 67,885 metres of drilling across 278 drill holes, and assumed commodity prices of US$1,700 per oz. gold and US$23 per oz. silver.

Skeena said there were no significant changes to the underground resource at Eskay, which comes to 1.8 million measured and indicated tonnes grading 4.66 grams gold for 274,000 oz., and 95.54 grams silver for 5.6 million ounces. Inferred resources are pegged at 272,000 tonnes grading 4.21 grams gold for 37,000 oz. and 25.37 grams silver for 222,000 ounces.

In a research note on Wednesday, BMO precious metals and minerals analyst Andrew Mikitchook wrote that it’s encouraging the grade of 3.47 grams gold equivalent remains unchanged from 2022, which reconfirms Eskay as one of the highest-grade open pit developments globally.

Mikitchook added that BMO has increased its target price for the company to $16.50 from $16.00 in response to the potentially longer mine life.

Eskay is located about 61 km north of Stewart and just northeast of the border with Alaska.

Skeena shares traded at $6.49 on Wednesday morning in Toronto, in a 52-week window of $5.64 and $10.38, valuing the company at $571.9 million.