Skeena says Eskay Creek 49% complete

Executive Summary

• Skeena Resources provided a project update on its 100%-owned Eskay Creek gold-silver project, confirming it is 49% complete as of February 28, 2026, with initial production still targeted for Q2 2027 and commercial production in Q3 2027.
• The company released an updated 2026 construction cost estimate of $659 million (U.S.), representing a $99 million increase from the 2023 Definitive Feasibility Study (DFS) estimate of $560 million.
• The cost increase is attributed to inflation, stricter water discharge standards, IBA commitments, and design optimizations, partially offset by $94 million in savings from leasing infrastructure rather than building it outright.

Key Details

• Project Status: 49% complete as of Feb. 28, 2026; 66% of total project costs contractually committed.
• Production Schedule: Initial production targeted for Q2 2027; commercial production expected in Q3 2027.
• Updated Cost Estimate:
  • New total estimate: $659 million (U.S.).
  • Previous 2023 DFS estimate: $560 million (U.S.).
  • Variance: +$99 million (U.S.).
  • Both estimates include ~$35 million (U.S.) in cost contingency.
• Cost Drivers for Increase:
  • General cost escalation (inflation in labor, materials, construction services).
  • Stricter water discharge standards in BC (lowest elemental limits globally) requiring enhanced water management/treatment infrastructure.
  • Incorporation of Tahltan values and Impact Benefit Agreement (IBA) commitments.
  • Optimization of permanent camp location for tailings storage facility (TMSF) configuration.
  • Operational design enhancements (mill building structural improvements, covered conical stockpile, concentrate dewatering improvements, HVAC/dust control).
  • Updated pricing/scope for high-voltage electrical infrastructure and Volcano Creek substation.
  • Schedule extension of ~6 months for construction sequencing (already factored into prior financing disclosures).
• Cost Mitigations:
  • Leasing arrangements for water treatment plant, high-voltage electrical infrastructure, and camp facilities reduced upfront construction costs by ~$94 million (U.S.).
• Capital Expenditure Breakdown:
  • Spent to date (as of Dec. 31, 2025): ~$305 million (U.S.).
  • Remaining development expenditures to initial production: ~$354 million (U.S.) (net of $94M leasing savings).
  • Peak construction spending in 2026: ~$291 million (U.S.).
  • Balance for 2027 (commissioning): ~$63 million (U.S.).
• Remaining Construction Scopes:
  • Continuation of open pit mining for construction rock; ore mining/stockpiling starting Q4.
  • Haul road widening to TMSF.
  • Completion of Stage 1 TMSF dam.
  • Water management infrastructure (ponds, diversions) and completion of Stage 1 & 2 water treatment plants.
  • Substantial completion of processing facilities and mechanical completion testing/precommissioning.
  • Completion of Volcano Creek substation, 69kV power line, and Eskay Creek substation.
  • Energization of facilities with permanent grid power.
  • Completion of permanent camp.

Notable Quotes

• "Our strategy of initiating development activities well ahead of final permit receipt has delivered meaningful value for our shareholders. By acting early, we reduced project timeline risk and minimized inflationary impacts across key scopes by securing procurement contracts earlier. Having completed the permitting process and reaching the midway mark on construction, we felt it was important to provide a project update and show how far the project has advanced." — Randy Reichert, President and CEO