(Kitco News) - Skeena Resources (TSX: SKE, NYSE: SKE) announced today that the company has repurchased the 0.5% net smelter return (“NSR”) royalty held by Barrick Gold on the Eskay Creek gold-silver project, at a cost of C$17.5M.
Skeena said it initially granted Barrick Gold a NSR royalty of 1% over Eskay Creek in connection with the company’s acquisition of the project, adding that this royalty has been reduced to a 0.5% NSR as a result of this transaction.
Importantly, Skeena noted it has granted to Franco-Nevada a right of first refusal (the “ROFR”) over a 0.5% NSR royalty on Eskay Creek. The ROFR granted to Franco-Nevada will be subject to a competitive auction process conducted by Skeena, in which Franco-Nevada will participate, prior to October 2, 2023.
If Skeena has not sold the NSR royalty to Franco-Nevada or a third party by October 2, 2023, Franco-Nevada will have the right to purchase the royalty for C$22.5M, for a period of 30 days, the company said.
Skeena Resources is a Canadian mining exploration and development company focused on revitalizing the past-producing Eskay Creek gold-silver mine located in Tahltan Territory in the Golden Triangle of northwest British Columbia, Canada.
The company released a Feasibility Study for Eskay Creek in September 2022 which highlights an open-pit mine with average grade of 4.00 g/t AuEq, an after-tax NPV5% of C$1.4B, 50% IRR, and a 1-year payback at US$1,700/oz Au and US$19/oz Ag. Skeena is currently continuing exploration drilling at Eskay Creek.
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