Skeena Resources (TSX: SKE) (Pink: SKREF) reviewed 9-30-2020
Market Cap: $275M (USD)
Share Price: $2.04 (USD)
Shares outstanding: 134,801,872
Cash on hand: 13.1 M (CAD) as of 31 Dec 2019 (Annual report).
Long-term Debt: None stated on the balance sheet (Dec. 2019 Annual).
Current operations: No (drilling).
Credit: Did not see a revolver or credit facility in the 2019 Annual.
Insiders own: 0.64% (per Yahoo finance); Nine institutions own approx. 41% of the shares.
Website: skeenaresources.com
Investor presentation: https://skeenaresources.com/investors/corporate-presentation/
Good property, good ore grades.
Operates in the ‘golden triangle’ of BC.
Two projects: Eskay Creek (flagship) and Snip. Will operate as open-pit; prev. underground.
Eskay Creek produced 3.5 M oz. gold and 160 M oz silver in operation 1994-2008 (Barrick Gold).
Drill results Aug 2020 – three exploration holes below the historic mine over a 6-km strike – promising results in 2 of 3, intersected 5-6 g/ton grade – clean mineralization. Continues to seek a syn-volcanic feeder system in the area.
Six rigs are drilling, planned to add two in Sept-Oct.
PFS in 1H 2021, Feasibility in 2H 2021, mine construction in 2022, and expects to produce in 2024.
Barrick Gold is a shareholder – 22 M shares and 1/2 warrants — would own 17% if all-in.
Reserves & Resources = estimated 5 M oz at 4.4 g/t (I don’t think this is a Proven & Probable number?)
Targeting 306,000 oz Annual production and 5 M oz. total
AISC = $615 oz (USD)
Management: CEO Walter Coles has not built a mine yet (?)
Bottom line:
- I like the high-grade open-pit property and the deal that Walter Coles did to acquire it from Barrick
- I was impressed with their presentation at the July Sprott Symposium and bought a small position. I hold a +2.8% portfolio weighting.