The PEA envisions the development of a high-grade openpit with a mill feed grade averaging 3.23 grams per tonne gold and 78g/t silver, and a 6,850 tonne per day mill and flotation plant to produce a concentrate, with a capital expenditure of C$303 million (US$233 million).
The project would yield an after-tax net present value at a 5% discount rate of C$638 million, a 51% internal rate of return and 1.2 years payback using US$1,325/oz gold and US$16/oz silver metal prices. The life of mine all-in sustaining costs would be C$983/oz of gold equivalent.
"Eskay Creek was a remarkable discovery that became an extraordinary underground mine in 1994 and produced until 2008. This PEA demonstrates that Eskay Creek still has a bright future ahead, revitalised as an open-pit gold and silver mine, with the additional possibility for underground mining," said CEO Walter Coles.
Existing infrastructure at the site installed by previous operators and the decision to focus on the production of a concentrate rather than doré enabled Skeena to keep initial capital costs down, while also reducing execution risk.
The PEA outlines 1.5 years of pre-stripping, stockpiling and mine access development prior to the processing facility becoming fully operational in Year 1. Eskay Creek's existing infrastructure includes all-weather access roads, previously permitted tailing storage facilities and proximity to a recently commissioned 195MW hydroelectric facilities and linked power grid.
Eskay Creek hosts a February 2019 pit constrained mineral resource estimate of 12.7 million tonnes grading 4.3g/t gold and 1110g/t silver for 1.7Moz gold and 44.7Moz silver. It also hosts an inferred resource of 14.4Mt grading 2.3g/t gold and 47g/t silver for 1.1Moz gold and 778,000oz silver.
Skeena plans to continue drilling to convert inferred resources to the measured and indicated categories and to evaluate the potential to expand and upgrade the pit constrained resources.
Shares in Skeena Resources opened almost 11% higher at C62c. valuing the company at $65 million.