GGPChat

TSX-listed Skeena Resources has secured a $750m financing package for its 100%-owned Eskay Creek mine redevelopment (Mining.com)

Roughly 4moz at 3.6g equivalent (when in production Eskay Creek was once the highest grade gold mine in the world!)

Shares down roughly 5%. - and still 3 years to production:

Direct read through to securing 100% of Havieron ( and developing it. )

https://www.canadianminingjournal.com/n ... velopment/

Now…. over to the naysayers

of note, 18.4% up from the placing.

Absolutely ripping higher - now 31% up from the funding announcement. But still 3 full years to production..

SKEENA Still ripping higher everyday now 62% up (in 5 days) from their 'dilutive' funding announcement and HUGE (dilutive) royalty gold stream off-take agreement with Orion embedded therein.

BUT - The read across to GGP is valid and compelling :

1) They have NO FINAL PERMITS yet, 2) but 3.3moz Au in the proven and probable @ 3.6 g/t equiv and 350koz a year with 3) an ASIC of US $687/oz :

We have roughly 2.54moz (based on last MRE) and once they covert this DFS likely to 'proven and probable' category on a 30% basis (and as we know still growing).. especially given this new gold price regime the DFS will likely deliver greater expectations in my view. Certainly better than NCM who have a batting history of underplaying and underwhelming (only once they realised how big Havieron was).


So Remember, similar Grade and in effect Similar scale to Hav (albeit Hav probably much bigger 8.4moz already v 4moz (on what we know) - BUT Skeena has a Massive new plant to build out at $750m capex DFS and still 3 years to production with significant streaming dilution.

Loving this Skeena V GGP chart:



https://www.youtube.com/watch?v=iQLv_PCNNSk

Here's a pretty good CRUX interview with Skeenas exec Chair - covers how they structured the debt and the deal..and mitigating risk. He's dead f-ing clear about the 'dirty business' of shorting mining developers , to cover into equity raises and how to avoid it... Shaun will no doubt be all over this like a wet flannel.

He accuses the big banks of leaking info to the Hedge funds on upcoming equity raises. Barstewareds - hence what happend at GGP last year and wyloo stepping in. Of note, is their policy of not/never using external contractors (take note HZM HUM Adriatic ) BUT using 'internal people' to deliver projects.

So to summarise, the Esaky Creek Skeena situation: to 500koz production

$750m Capx and $1bn funding raise. Composed of:

$100m in Equity, To Orion
$200m Gold stream (ouch!) to Orion
$350m Senior Debt Facility
$100m cost overrun bank debt facility

So Key takeaway: Curcuial is the Direct Equity investment componant - ie Wyloo - no banks involved in dubious Equity raises = No Friction or fall in stock price . company gets ALL the cash w/o fees or dilution.

THe project will deliver a 57% IRR internal rate of return after Tax. Walter Coles suggests Y1 $800m cash flow. thus - pays back in year 1. They can buy back their streams too if they hugely in profit ie gold price moves higher again. Streamers get the upside - which is usually a big problem for equity holders - but Skeena as well as buy back option also implemented a 500m limit 'perimeter area of interest' on the stream, cutting off the growth in the stream should another deposit be found in the immediate vicinity a big risk in previous streams making the likes of Franco Nevada very rich.

He backs ups everything i have said on subjectL

32mins "we are 0.25x presenrly but as you move from development to a producer you should move through the development value curve be 0.8x to 1x Nav"

NAV of 100% of Havieron is estimated to be greater $5bn AUZ by Sprott - where they used the words to the effect of “which ever way we scope this we get >10years at >225koz per year”.

- Walter Coles of Skeena ALSO categorically validates everything I have said on subject of price to Nav ratios in previous posts…

For avoidance of ALL doubt a Valuation 1x Nav is normal for young producers with good quality big deposits... THe closer you get to production the closer you get to 1xNav

Telfer plus 100% of Hav has to production just has to be >$1.2bn Nav becuase Hav alone was 1.2bn according to the last MRE.

Careful who you listen to - the shorter muppets - who are no doubt quietly massively loading up on GGP stock.

I always said one day this stock will explode higher and given the above on a 100% basis $1.4bn to $2.5bn US NPV is nailed on in opinion of me and Sprott and it will get valued at 0.8x to 1x NPV as we approach production ramp up. If they can pump out more gold and massively extend the mine life in the DFS then the NPV figures can only get better from that...

Watch this space...good luck. I just cant wait for Shaun to actually deliver.

Skeena now up 72% despite the terrifying 'DILUTIVE' fund raising... and massive gold stream off take with Orion.

Smelling the coffee -

Degrey gets billions in funding away, despite massive CAPEX very complicated 30-40% refractory gold metallurgy and is years to production
Skeena gets funding away and is 3 years to production with no permits to mine or environmental permits

Greatland - is 'months' to production 80% of the way to the highest grade part of the orebody and has a 22mt plant built ready to go.

Just Saying...

I see Skeena now in the 11s so much for the pull back. Up a whopping 155% since February.,,,,

Further, there’s 1m size buy orders on the ggp order
book .. I could sell 1m a pop today all day.

I suspect this buyer is likely Ninetops imaginary shorter.
It appears there are buyers a plenty - certainly not wishing to over pay mind…. But 1m a pop 7.45 will suffice :0)

$2600 gold soon markets scratches it’s head - Surprise surprised..? Then next the whoosh to $3000

This golden bull has only just begun.. expect another 3 Years of this now!