Skeena Gold + Silver | Walter Coles and Jimmy Connor

Jimmy Connor Feb 25, 2026 22:22

Summary

Eskay Creek is fully permitted and half built, with Coles guiding to first cash flow in 2027 instead of 2028 or 2029.

Silver supplies roughly 40% of the project's value, averaging 9.5 million ounces a year in the first five years.

AISC (All-In Sustaining Cost — what it really costs to produce an ounce) runs $538 per gold-equivalent ounce in years one through five.

Coles says the Blackstone-Orion package covers construction, and refinancing the 12.13% debt plus a two-thirds stream buyback come next.

Management expects investors to front-run the first cash flow, and values Skeena between mid-tier gold producers on EBITDA multiples.

The host cites Artemis Gold as a second valuation comparable, putting it at around a $10 billion Canadian market cap.

Coles says Barrick's Eskay Creek mine, which ran from 1994 to 2008, produced 3.3 million ounces of gold and 160 million ounces of silver at grades of 45 grams per tonne of gold and 2,200 grams per tonne of silver, making it the highest-grade gold and silver mine in the world over that period.
He credits Barrick as a smart company that did not make a mistake in exiting, arguing the shutdown reflects the conditions of the 1990s rather than any problem with the asset.
His first explanation is regulation: British Columbia's government in the 1990s was hostile to mining and an open pit was considered difficult or impossible to permit, so the previous operator developed an underground mine instead.
His second is energy cost, noting the mine ran on diesel and propane and that with oil at $100 a barrel in the early 2000s he was told energy was more than half of operating costs.
His third is price, estimating gold averaged about $300 an ounce while Barrick operated, against roughly $5,000 at the February 2026 as-of date.

The host uses Lundin Gold as a valuation comparable, putting it at roughly a $26 billion Canadian market cap while Skeena sits near $4 billion.

Coles says Skeena received its final Environmental Management Act permit in the week before the February 2026 as-of date, making Eskay Creek fully permitted for construction and production.
He puts after-tax free cash flow at about $1.4 billion a year across years one to six at spot prices; at the lower 2023 feasibility inputs of $1,800 gold and $23 silver, he says the mine would still generate $513 million in year one and $240-370 million a year in years two through six.
He cites an all-in sustaining cost of $538 per gold equivalent ounce in the first five years and $684 over life of mine, which he says would place the open pit in the bottom 10% of the global cost curve.
Silver supplies roughly 40% of project economics on his numbers, at 9.5 million ounces a year in the first five years and 7.7 million ounces a year over life of mine, which he expects would make Eskay Creek Canada's largest silver mine; gold makes up the other two-thirds, or about 450,000 gold equivalent ounces a year.
Construction is about halfway done and he expects it to finish within 15 months; funding is secured through a $750 million US package agreed with Blackstone and Orion in June 2024 against a $560 million feasibility capex, comprising $100 million of equity, a $200 million gold stream, a $350 million senior secured facility and a $100 million cost overrun facility.

Top takeaway Coles says Skeena copied Elon Musk's gigafactory playbook by starting construction before final permits were secured, accepting the risk that the work would have to be torn down if permits did not arrive.

Top takeaway His central argument is a valuation gap: mid-tier gold producers trade at about 7.5 times EBITDA, and Skeena is expected to produce $2.1 billion of EBITDA, which he says would imply roughly a $15 billion market cap against about $4 billion today.
He points to Lundin Gold at roughly a $26 billion Canadian market cap and Artemis Gold at around $10 billion as the comparables a producer of Eskay Creek's size would command.
He closes by inviting viewers into the final leg of the Lassonde curve, the stretch immediately before a mine starts generating cash flow.
Connor notes Skeena was a new name for him before this interview and frames the whole discussion as introducing the stock to his audience.