Skeena raises $7.8 million to fund exploration in British Columbia

Skeena Resources (TSX :SKE, NYSE: SKE) is looking to raise more funds to advance its exploration activities within British Columbia’s Golden Triangle by undertaking a non-brokered private placement.

In an announcement Tuesday, the Canadian precious metals miner said it plans to issue around 1.22 million flow-through common shares at an average price of C$8.53 per share for aggregate gross proceeds of C$10.4 million ($7.8m).

The new exploration financing sent Skeena Resources’ shares up 4.3% to C$6.32 apiece by midday Tuesday, for a market capitalization of C$561.9 million ($421.1m).

This placement adds further working capital to Skeena, which earlier this week closed a C$81 million financing package with Franco-Nevada to develop its 100% owned Eskay Creek gold-silver project, which hosts what was once the highest-grade gold mine in the world.

A November 2023 feasibility study for Eskay Creek outlined a 10-year operation with average annual production of 370,000 oz. of gold equivalent. Its after-tax net present value (at a 5% discount) is estimated at C$2 billion, using base case metal prices of $1,800/oz. gold and $23/oz. silver.

“With our base case after-tax NPV surpassing C$2 billion, Eskay Creek stands out as a rare potential Tier 1 gold mining project, located in a politically stable jurisdiction,” Skeena’s executive chairman Walter Coles said in Tuesday’s release.

On top of Eskay Creek, Skeena also owns the past-producing Snip mine, which it bought from Barrick Gold in July 2017. Recent mineral resource update for the Snip project showed 823,000 indicated gold ounces hosted within 2.74 million tonnes at an average grade of 9.35 grams per tonne.

In addition to revitalizing the two former BC mines, the company is also conducting a grassroots regional assessment of its 100% owned KSP property, located 24 km southwest of Eskay Creek. The property was acquired through Skeena’s takeover QuestEx Gold & Copper last year, which added a total of 64,000 hectares of largely unexplored area to the company’s land package.