Canadian firm Skeena Resources has divested a 0.5% net smelter returns royalty (NSR) on its past-producing Eskay Creek gold-silver project in Canada to gold-focused royalty and streaming firm Franco-Nevada for a cash consideration of C$27m ($19.8m).
As part of the deal, which was signed in early December 2022, Skeena will also receive an additional cash consideration of C$1.5m ($1.10m).
Skeena plans to use the net proceeds to fund exploration and development activities at the Eskay Creek precious metal-rich volcanogenic massive sulphide (VMS) deposit.
It will also be used for general administration and corporate purposes.
The world’s highest-grade gold mine when in production, the Eskay Creek project was acquired by Skeena in 2020 from Barrick Gold.
Located in the Tahltan Territory in the Golden Triangle of British Columbia, the Eskay Creek mine reported production of 3.3 million ounces (Moz) of gold and 160Moz of silver at average grades of 45g/t gold and 2,224g/t silver from 1994 to 2008.
Skeena Resources is currently focused on revitalising the Eskay Creek mine. It is currently undertaking exploration drilling work at the mine.
In a press statement, Skeena said: “In connection with this transaction, Skeena terminated Franco-Nevada’s right of first refusal to purchase a 0.5% NSR on Eskay Creek, which right was granted to Franco-Nevada.”
According to a feasibility study, the Eskay Creek mine is anticipated to have an annual production capacity of 352,000oz AuEq and an operational life of nine years.
It is planned to be an open-pit operation featuring conventional mining equipment.