The feasibility study for the Eskay Creek gold/silver project, in the Golden Triangle of British Columbia, has delivered robust economics, with an aftertax internal rate of return (IRR) of 50.2% and an industry-leading one-year payback on preproduction capital of C$592-million.

Using a gold price of $1 700/oz and a silver price of $19/oz, the project has a net present value of C$1.41-billion.

Even at a gold price of $1 400/oz and a silver price of $13/oz, the project still generates an average yearly aftertax cash flow of C$209-million with an aftertax IRR of 36% and a 1.5-year payback on initial capital, said CEO Walter Coles.

The capital costs represent a 21% increase compared with the July 2021 prefeasibility study (PFS) of C$488-million, reflecting inflationary trends in labour and material costs.

The feasibility study outlines an average production profile of 431 000 gold-equivalent ounces in the first five years of operation. It is anticipated that Skeena will have a stockpile developed ahead of mill start-up of about 600 000 t of ore.

“The feasibility study confirms the robust economics of the world-class Eskay Creek project originally shown in the PFS, but with improved definition. The openpit mineable, high-grade ore combined with the existing infrastructure at the Eskay Creek site and nearby hydropower provides for an extraordinary project that can be developed by Skeena.

“While the team continues to work on optimization of the project, my primary focus will now shift to advancement of the permitting process as we move Eskay Creek toward construction,” said Skeena president Randy Reichart.

The Eskay Creek revitalisation project will require regulatory authorisations including a consent decision from the Tahltan Central Government, a provincial environmental assessment certificate under the BC Environmental Assessment Act and federal decision statement under the Impact Assessment Act. The federal decision statement can be granted through a process of “substitution” whereby federal agencies participate in the British Columbia process.

Construction and operating permits can be granted in accordance with provincial and federal legislation and regulations once the environmental assessment process is complete.

The Eskay Creek project has entered the British Columbia environmental assessment process and will be applying to follow the “substitution” process.