Skeena arranges $750-million (U.S.) note offering

Executive Summary

• Skeena Resources Ltd. proposes a $750 million senior secured notes offering due 2031 to refinance existing project financing and fund a partial buyback of its gold stream.
• The company intends to use approximately $184 million of the proceeds to buy down its existing $200 million gold stream agreement, reducing the stream percentage deliverable by 66.67%.
• The transaction involves canceling an existing undrawn $350 million senior secured term loan and cost overrun facility, with remaining proceeds allocated to an interest reserve account, disbursement account for project advancement, and general corporate purposes.

Key Details

• Offering Structure: $750 million aggregate principal amount of senior secured notes due 2031.
• Guarantees and Security: Notes are fully and unconditionally guaranteed by certain subsidiaries related to the Eskay Creek project and secured by a first-priority lien on company and guarantor property, including equity interests, segregated accounts, and interests in the Eskay Creek project.
• Use of Proceeds:
  • ~$184 million: To finance the gold stream buydown (lump sum payment to stream purchasers).
  • ~$100 million: To finance an interest reserve account (covering the first three semi-annual interest payments).
  • Remaining proceeds: To finance a disbursement account for advancing the Eskay Creek project, paying fees/expenses, and adding cash to the balance sheet for general corporate purposes.
• Stream Buydown Terms:
  • Reduces the stream percentage deliverable from production at Eskay Creek to stream purchasers by 66.67%.
  • Involves an amended stream agreement with Orion and affiliates, including termination of the stream cost overrun facility and amendments to liquidity and reporting covenants.
• Debt Cancellation: Cancellation of the existing $350 million senior secured term loan and cost overrun facility (currently undrawn) concurrent with the offering completion; no fees expected for cancellation.
• Strategic Rationale: Intended to improve future operating margins, increase exposure to gold prices and future production, and enhance overall project economics for the Eskay Creek project.

Notable Quotes

• No direct quotes from management were included in the provided text.