Skeena Resources - High-Grade Gold Past Producer Reimagined as Major Operation

• Redeveloping a former high-grade, underground gold mine in Canada into a large, open-pit operation
• Recently completed Definitive Feasibility Study shows strong potential economics: $2B NPV, 43% IRR
• Made improvements to the original plan including simplifying the process flowsheet and improving metallurgical recoveries
• Targeting first production in mid-2026 with a 3-4 month ramp-up period
• Looking to secure a project financing package in the next 6-12 months comprised of equity, stream financing, and debt

About Skeena Resources

Skeena Resources is a mining development company focused on advancing the Eskay Creek gold-silver project, located in the Golden Triangle region of British Columbia, Canada. Recently, Skeena completed a Definitive Feasibility Study (DFS) on developing Eskay Creek into a large, open pit operation. The results showcase a technically simple, high-margin project with compelling economics. Skeena is now shifting focus to financing and permitting activities over the next 12-24 months, with the aim of achieving first production in 2026.

Interview with President & CEO, Randy Reichert

Overview of the Eskay Creek Project

The Eskay Creek deposit was historically operated as a high-grade underground gold mine by previous owners, before being shut down in 2008. Skeena acquired the asset in 2018 with the vision of redeveloping it as a large, open-pit operation. The site benefits from extensive existing infrastructure and permits from past mining activity.

Skeena has made several enhancements to the original mining plans in order to reduce costs and technical complexity. This includes simplifying the process plant flowsheet and improving metallurgical recoveries. The company also changed the mining method in order to achieve higher-grade ore.

Results of Definitive Feasibility Study

In November 2023, Skeena released the results of a Definitive Feasibility Study (DFS) on Eskay Creek. The DFS outlines an initial 14-year mine life, an average annual production in years 1-5 of 455,000 ounces at 5.5g/t AuEq with annual after-tax free cashflow of C$474 million. And in years 1-10, an average annual production of 370,000 ounces at 4.2g/t AuEq, with an average annual after-tax free cashflow of C$365 million. This will be at low all-in sustaining costs of $682/oz.

The economics presented are very robust, including an after-tax NPV of C$2 billion at a 5% discount rate and 43% IRR. The initial capital cost estimate is C$713 million. Skeena highlights the rapid payback period of just 1.2 years, making Eskay Creek particularly attractive.

“With first-year production targeted in 2026, this fits the profile for construction-ready, permitted projects which should command premium valuations."

The Path Forward

Skeena is now focused on securing financing and final permitting for Eskay Creek over the next 12-24 months. The company is targeting a total funding package of around $750M, looking to sources such as equity, stream financing, and debt. The final Environmental Assessment is expected by mid-2025.

If financing and permits proceed on schedule, Skeena anticipates being ready for a construction decision in 2025. The construction timeline is estimated at 18 months, allowing the first gold production in mid-2026.

“We want to look at announcing [financing] kind of in the first half of next year," Reichert explained. "Expect to be a production kind of mid-2026."

The Investment Thesis for Skeena Resources

• World-class asset with exceptional grades, and scale potential - a clear path to becoming a mid-tier gold producer
• Technically simple, low-risk build & ramp-up; experienced team to execute
• Robust economics at feasibility stage; significant value potential if executed well
• Currently undervalued based on the quality of asset; trading at a deep discount to NAV
• Key near-term catalysts around financing, and permitting should unlock substantial upside

Skeena Resources offers upside potential from a world-class gold development asset which is substantially undervalued today. There is an experienced operating team focused on the timely execution of financing and permitting activities over the next 12-24 months. Successfully achieving milestones around the final investment decision and the path to production should catalyze significant returns for early-stage investors.

Skeena Resources' recent DFS highlights the potential to profitably redevelop the former Eskay Creek mine into a large, scalable gold operation with exceptional economics. The company's experienced team are now focused on financing and permitting activities during 2024-2025, with the aim of achieving the first gold pour in mid-2026 based on an 18-month targeted construction period. The current valuation represents a substantial discount relative to this asset's quality and potential upside. Near-term derisking as Skeena Resources advances toward production should provide an opportunity for outsized investor returns.