Skeena Resources Completes US$750M Senior Secured Notes Offering at 8.500% to Refinance Debt and Fund Eskay Creek Development
Skeena Resources Ltd. has successfully completed a US$750 million offering of 8.500% Senior Secured Notes due 2031, marking the first public high-yield notes offering by a pre-revenue mining company in over a decade. This comprehensive refinancing strategy aims to optimize the company's capital structure, reduce its overall cost of capital, and enhance financial flexibility. Proceeds will be used to repurchase 66.67% of its US$200 million Gold Stream for US$184 million, prefund 18 months of interest payments totaling US$94 million, and allocate approximately US$470 million towards the remaining construction of the Eskay Creek project, which is targeting initial production in Q2 2027. This move is expected to materially increase Skeena's exposure to gold prices and improve future operating margins.
Key Highlights
- Skeena Resources completed an offering of US$750 million aggregate principal amount of 8.500% Senior Secured Notes, which will mature in 2031 and are non-callable for the first two years.
- The refinancing strategy includes the cancellation of US$350 million undrawn Senior Secured Loan and US$100 million Cost Overrun Facility, and the repurchase of 66.67% of the US$200 million Gold Stream.
- Proceeds from the Notes will be used to repurchase 66.67% of the Gold Stream for US$184 million, prefund 18 months of interest payments with US$94 million, and allocate approximately US$470 million for Eskay Creek construction and general corporate purposes.
- Executive Chairman Walter Coles stated that this transaction represents the first public high-yield notes offering by a pre-revenue mining company in over a decade, with strong support from firms like KKR and Bank of America.
- The Gold Stream buyback is anticipated to materially increase Skeena’s exposure to gold prices, lower the expected cost per ounce of gold, and enhance future operating margins for the Eskay Creek project, which is targeting initial production in Q2 2027.