Executive Summary / Key Takeaways

• Skeena Resources Limited (SKE) is transitioning from a precious metals developer to a producer, with its flagship Eskay Creek Gold-Silver Project poised to become one of the world's highest-grade and lowest-cost open-pit precious metals mines.
• The 2023 Definitive Feasibility Study (DFS) for Eskay Creek projects robust economics, including an after-tax Net Present Value (NPV5%) of C$2.0 billion and an Internal Rate of Return (IRR) of 43%, significantly outperforming industry averages.
• Strategic de-risking initiatives, including a C$1 billion financing package, positive Supreme Court judgment on tailings, and advanced permitting, are paving the way for targeted production commencement in the first half of 2027.
• Despite current development-stage financials showing no operating revenue and negative profitability, the project's projected life-of-mine (LOM) All-In Sustaining Costs (AISC) of $687 per ounce co-product gold equivalent offer a substantial competitive advantage against a backdrop of rising gold prices.
• Skeena's competitive edge lies in its proprietary, high-grade assets and regional expertise in British Columbia's Golden Triangle, positioning it as a compelling growth-oriented player amidst larger, more diversified gold miners.

Setting the Golden Stage: Skeena's Vision in a Bullish Market

Skeena Resources Limited (NYSE:SKE) stands as a focused precious metals developer, strategically positioned to capitalize on the burgeoning demand for gold and silver. Incorporated in 1979 and operating as Skeena Resources Limited since June 1990, the company has honed its expertise in the exploration and development of mineral properties across Canada. Its core focus, and indeed its primary investment thesis, revolves around the 100%-owned Eskay Creek Gold-Silver Project, a past-producing mine located in the prolific Golden Triangle region of British Columbia. This region is renowned for its rich mineral endowment, and Eskay Creek is being redeveloped as a modern open-pit operation, aiming for a 12-year mine life.

The broader macroeconomic environment provides a compelling tailwind for precious metals. Safe-haven investors continue to flock to gold amidst persistent geopolitical and economic uncertainties, including ongoing trade tensions and conflicts in Ukraine, Russia, Israel, and Iran. This sentiment is further bolstered by a weakening U.S. dollar, which has declined approximately 10% over the past six months. Central banks globally are actively accumulating gold, with projections indicating purchases of 1,000 metric tons this year; China's central bank, for instance, increased its reserves for the seventh consecutive month, reaching 73.83 million fine troy ounces by the end of May 2025. Analysts are increasingly bullish on gold prices, with some anticipating the metal could reach $4,000 per troy ounce by mid-2026, and JPMorgan analysts expecting an average of $3,675/oz by Q4 2025, with potential to exceed $4,000/oz by Q2 2026. This favorable market backdrop significantly enhances the economic outlook for projects like Eskay Creek.

The Eskay Creek Advantage: Operational Excellence and Economic Promise

Skeena's core differentiator lies not in a traditional "technology" but in the exceptional geological characteristics and optimized operational plan for its Eskay Creek project. The company is leveraging advanced mining and processing methodologies to unlock the value of this high-grade deposit. The 2023 Definitive Feasibility Study (DFS) for Eskay Creek underscores its world-class potential, projecting an after-tax Net Present Value (NPV5%) of C$2.0 billion and an Internal Rate of Return (IRR) of 43% at base case metal prices. These figures are notably superior to typical gold mining projects, which often see IRRs between 15% and 25%. The project also boasts an impressive payback period of just 1.2 years.

Operationally, Eskay Creek is designed to be one of the highest-grade and lowest-cost open-pit precious metals mines globally, with significant silver by-product production. The DFS estimates life-of-mine (LOM) cash costs at $568 per ounce co-product gold equivalent and LOM All-In Sustaining Costs (AISC) at a highly competitive $687 per ounce co-product gold equivalent. This AISC is substantially lower than the global average, which is approaching $1,500 per ounce. The project is expected to produce an average of 320,000 gold equivalent ounces annually over its 12-year mine life, with the first 1-5 years projected to average 450,000 gold equivalent ounces annually. Furthermore, the company secured a vital interconnection and transmission agreement with Coast Mountain Hydro Limited Partnership in May 2025, ensuring access to a clean and cost-effective energy supply for the project. This strategic infrastructure, coupled with the utilization of existing facilities from the former mine, contributes significantly to the project's low operating cost profile and environmental sustainability. Beyond gold and silver, Eskay Creek is also expected to produce critical minerals such as antimony, zinc, lead, and copper, diversifying its output and enhancing its economic contribution.

From Development to Production: Financial Trajectory and Funding

As a company in the development stage, Skeena Resources currently reports no operating revenue and consequently, negative net income and cash flows. For the year ended December 31, 2024, the company reported an annual net income of -$151.94 million and annual operating cash flow of -$127.90 million. The latest TTM (trailing twelve months) figures as of September 26, 2025, show a net income of -$163.82 million and an annual free cash flow of -$130.61 million. These figures are characteristic of a company investing heavily in its future production capabilities.

Crucially, Skeena has proactively addressed its capital requirements for the Eskay Creek project. In June 2024, the company secured a comprehensive C$1 billion (US$750 million) financing package with Orion Resource Partners, designed to fully fund the pre-production capital expenditures for Eskay Creek. This package includes a US$100 million equity investment, a US$200 million gold stream, US$350 million in senior secured debt, and a US$100 million cost overrun facility. Skeena received a second tranche of US$45 million under its gold stream arrangement in December 2024, with the remaining three tranches of US$50 million each anticipated throughout 2025. This robust financing structure provides a clear path to commercial production, currently targeted for the first half of 2027.

De-Risking the Path Forward: Permitting and Strategic Milestones

Skeena has made substantial progress in de-risking the Eskay Creek project, systematically addressing potential roadblocks. A significant legal victory occurred in April 2025 when the Supreme Court of Canada dismissed appeals regarding the ownership of mineral rights to materials in the Albino Lake Storage Facility at Eskay Creek, effectively removing a key risk factor to production related to tailings management.

The company is also advancing rapidly through the permitting process. In April 2025, Skeena filed its Environmental Assessment (EA) application with the BC Environmental Assessment Office, followed by the filing of Joint BC Mines Act and Environmental Management Act Applications in May 2025, both for joint review with the Tahltan Central Government. Management expects to secure the environmental assessment certificate, the Mines Act permit, and construction approval by the end of 2025, with building commencing in 2026. Randy Reichert, President & Chief Executive Officer of Skeena, emphasized this proactive approach, stating, "By anticipating potential roadblocks and addressing them early, we're reducing the risk that often accompanies projects of this scale". The company also published its 2024 Sustainability Report in May 2025, highlighting its commitment to environmental, social, and ethical business practices and the significant economic benefits Eskay Creek will deliver to Indigenous Nations, British Columbia, and Canada.

Competitive Landscape: A Niche Leader in the Golden Triangle

Skeena Resources operates as a niche player within the Canadian precious metals sector, distinguishing itself from larger, more diversified global miners such as Newmont Corporation , Barrick Gold Corporation , Kinross Gold Corporation (KGC), and Agnico Eagle Mines Limited . While these industry giants benefit from operational scale and extensive mine portfolios, Skeena's strength lies in its focused approach on high-grade, low-cost assets in a premier mining jurisdiction.

Skeena's proprietary asset ownership, particularly its 100% stake in Eskay Creek and the nearby Snip mine, provides a significant competitive advantage. This control allows for greater operational agility and faster decision-making compared to the more bureaucratic structures of its larger counterparts. The projected low AISC of Eskay Creek positions it favorably against many competitors, as higher gold prices translate directly into enhanced profit margins and free cash flow for miners with efficient operations. For instance, while Newmont (NEM) and Barrick (GOLD) demonstrate robust growth rates and strong profitability from their established production, Skeena's unique value proposition is its potential for rapid growth from an emerging, high-quality project. The company's regional expertise in British Columbia further fosters efficient project execution and strong relationships with local stakeholders, including the Tahltan Nation, who are also shareholders.

However, Skeena's smaller scale and project concentration present vulnerabilities. Its financial metrics, such as profitability margins and cash flow, are currently less robust than those of established producers like Agnico Eagle (AEM), which benefits from consistent revenue and strong margins. The high capital requirements and extensive regulatory approvals inherent in the mining industry act as significant barriers to entry, protecting Skeena's valuable Canadian assets while also posing challenges for new entrants. Skeena is included in the Sprott Junior Gold Miners ETF (SGDJ) alongside other junior miners, but Eskay Creek's exceptional grade and cost profile set it apart, with its silver by-product production expected to surpass many primary silver mines.

Outlook and Investment Thesis: Unearthing Future Value

The investment thesis for Skeena Resources is centered on its transformation into a significant gold and silver producer, driven by the exceptional economics and de-risked pathway of the Eskay Creek project. Management's guidance points to a clear timeline, with environmental and mining permits expected by the end of 2025, construction in 2026, and commercial production commencing in the first half of 2027. This timeline aligns with bullish analyst projections for gold prices, which are anticipated to remain strong or even increase, potentially reaching $4,000/oz by mid-2026.

Skeena's strategic initiatives, including the comprehensive financing package and successful navigation of legal and permitting hurdles, have substantially reduced project risk. The company's commitment to sustainable development, as highlighted in its 2024 Sustainability Report, also positions it favorably with environmentally conscious investors and stakeholders. With its low projected operating costs and high-grade resource, Eskay Creek is poised to generate substantial free cash flow once in production, offering significant leverage to rising precious metal prices.

Key Risks and Considerations

Despite the compelling upside, investors should be mindful of inherent risks associated with mineral property development. These include potential delays in permitting and government approvals, fluctuations in commodity prices (though the current outlook is favorable), and operational factors such as accidents or equipment breakdowns. While significant de-risking has occurred, the transition from development to full-scale production is complex and subject to unforeseen challenges. The company's current lack of operating revenue means it remains reliant on its financing package and future capital raises until commercial production is achieved.

Conclusion

Skeena Resources Limited represents a high-conviction opportunity in the precious metals sector, offering investors exposure to a rare, high-grade, and low-cost open-pit gold-silver project. The company's strategic focus on the Eskay Creek project, coupled with its robust DFS economics, comprehensive financing, and diligent de-risking efforts, positions it for a transformative shift to production by 2027. Amidst a strong macroeconomic backdrop for gold and silver, Skeena's operational advantages and proprietary assets provide a compelling competitive edge against its peers. As the company continues to execute its development plan and secure final permits, it is well-positioned to unearth significant value for shareholders, making it a compelling consideration for discerning investment audiences seeking growth in the mining sector.