Skeena closes C$81M financing with Franco-Nevada

Skeena Resources announced it has closed C$81 million (US$61 million) financing with Franco-Nevada to develop its Eskay Creek gold-silver project in British Columbia.

Franco-Nevada got a 1% net smelter return royalty on Eskay Creek for C$56 million and a C$25 million unsecured convertible debenture. With the addition of the royalty, Franco-Nevada now has a 2.5% NSR on Eskay Creek.

"Securing funding for the advancement of Eskay Creek to production is critical for Skeena. As a management team and shareholders ourselves, we are striving to minimize shareholder dilution in what is currently an extremely difficult capital markets environment for mine developers in Canada," Skeena's executive chairman Walter Coles said. "To achieve this, we are pursuing less conventional financing pathways that limit the issuance of straight common equity."

The Canadian explorer said it will still maintain a substantial profit margin, with the 1% royalty adding around US$20 to Eskay Creek's costs of US$687/oz.

Eskay Creek was ranked first in Mining Journal Intelligence's top projects this year, scoring at least 8.2 out of 10 across all assessing categories, based on its 2022 feasibility study. The project is expected to produce 431,000ozpa of gold equivalent over the first five years of operation.