Franco-Nevada royalty over Eskay Creek Gold-Silver Mine
On January 3, 2023, Skeena Resources Limited ("Skeena") announced the closing of a royalty sale to Franco-Nevada Corporation ("Franco-Nevada").
Pursuant to the transaction, which was signed and closed concurrently on December 30, 2022, Skeena granted Franco-Nevada a 0.5% net smelter returns royalty ("NSR") on the Eskay Creek Project in exchange for closing cash consideration of C$27 million and contingent cash consideration of C$1.5 million.
In connection with the transaction, Skeena terminated Franco-Nevada's right of first refusal to purchase a 0.5% NSR on the Eskay Creek Project, which was granted to Franco-Nevada in December 2021.
Eskay Creek is a past-producing underground mine proposed for restart as an open-pit gold-silver mine. The mine is located within the traditional territory of the Tahltan Nation and the asserted traditional territory of the Skii Km Lax Ha Nation in the Golden Triangle of northwest British Columbia. The project is currently in the conceptual stage.
Skeena is a Canadian mining exploration and development company focused on revitalizing Eskay Creek.
Franco-Nevada is the leading gold-focused royalty and streaming company with the largest and most diversified portfolio of cash-flow producing assets.
Torys also acted on the following in connection with this project:
- Orion Mine Finance in the US$750 million project financing made available to Skeena Resources Limited to fund the development of the Eskay Creek gold-silver project in northwest British Columbia, including a US$100 million equity investment, US$200 million gold stream, US$350 million senior secured loan, and US$100 million cost over-run facility
- Franco-Nevada in the C$81 million financing package made available to Skeena Resources Limited to further develop the Eskay Creek Gold-Silver project in northwest British Columbia, including its C$56 million acquisition of a further 1.0% net smelter return royalty on production from Eskay Creek and a C$25 million private placement of 7% unsecured convertible debentures
Franco-Nevada in its strategic investment in Skeena Resources Limited and the negotiation of a right of first refusal over the sale of a 0.5% net smelter return royalty on the Eskay Creek gold-silver project located in northwest British Columbia
| Jurisdiction | Tahltan territory |
| Province/State | British Columbia |
| Country | Canada |
| Nature of Engagement | Royalty Agreement |
| Client | Franco-Nevada Corporation |
| Client Role | Acquiror |
| Value | $27,000,000 CAD |