Canadian mining exploration company Skeena Resources has secured a $750m financing package with Orion Resource Partners to advance its fully owned Eskay Creek gold-silver project in Canada.
The funding comprises $100m equity investment, a $200m gold stream with a buyback option of up to 66.7% within 12 months of commercial production, and a $350m senior secured loan. It also includes a $100m cost overrun facility provided as an additional gold stream.
Upon the completion of the full equity investment, Orion Resource Partners will own less than 20% of the issued and outstanding shares of Skeena Resources.
After the gold stream is fully drawn in five tranches, Orion Resource Partners will be able to receive 10.55% of payable gold produced from the Eskay Creek gold-silver mine.
The silver production at the Canadian project is not subject to the stream agreement.
The funding will help Skeena Resources with the development, construction, and general working capital for the Canadian gold-silver project. It is also expected to significantly de-risk the Eskay Creek project.
According to the definitive feasibility study released in November 2023 by Skeena Resources, the Eskay Creek gold-silver mine will require an estimated pre-production capital expenditure of $528m, including a $36m contingency.
The Canadian mining exploration company is working towards finalising the 2024 early works programmes and detailed engineering plans for the gold-silver project.
All the remaining permits required for full scale construction and operation of the mine are anticipated to be secured by the end of 2025. Subject to obtaining them, Skeena Resources will begin full scale construction at the Eskay Creek project in the following year.
The gold-silver project is slated to commence initial production in the first half of 2027.
Skeena Resources executive chairman Walter Coles said: “This complete financing package is a result of a competitive and comprehensive process undertaken to find the best financing solution for the Company.
“The result is certainty of funding to advance Eskay into production while balancing attractive cost of capital, flexibility, and optionality. We welcome Orion alongside existing shareholders as an aligned and committed stakeholder, further validating the merits of the project.”
