Skeena’s Eskay Creek gold project boasts NPV of $1.4 billion, IRR of 56%

Skeena Resources (TSX: SKE: US-OTC: SKREF) has released a preliminary feasibility study on its 100%-owned Eskay Creek gold project. The study outlined an after-tax net present value of $1.4 billion and internal rate of return of 56%. A gold price of US$1,550 per oz. and silver price of US$22 per oz. were used.

The project encompasses a former producing mine north of Stewart in British Columbia’s Golden Triangle.

Pre-production capital expenditures are estimated at $488 million, followed by sustaining capital of $47 million and reclamation costs of $92 million. The payback period is estimated at 1.4 years. 

The prefeasibility study covers a high-grade conventional truck and shovel open pit mine. Proven and probable reserves are 26.4 million tonnes with a diluted grade of 3.37 grams gold per tonne and 94 grams silver per tonne. The mine is designed to provide 2.9 million tonnes of mineralized material per year to the mill in the first four years and 2.7 million tonnes annually for the remainder of the mine life, which will total 9.8 years. The project would produce a saleable precious metals concentrate.

With life-of-mine gold recovery at 84%, total gold production will be over 2.4 million ounces. Silver recovery is estimated at 87%, and total production will be 70.9 million oz. of silver. All-in sustaining costs are estimated to be US$548 per oz. gold-equivalent. Over the life of the Eskay Creek project, Skeena is looking at an after-tax free cash flow of $2.1 billion.