Keena Resources (TSX: SKE) has released a preliminary feasibility report (PFS) for its 100%-owned Eskay Creek gold project, which has a net present value of 1.4 billion Canadian dollars ($1.1 billion) after tax and an internal rate of return of 56 %. The investment payback period is estimated to be 1.4 years. At that time, the price of gold was US$1550 per ounce and the price of silver was US$22 per ounce.

The project includes a former production mine north of Stewart in the Golden Triangle of British Columbia. The pre-production capital expenditure is estimated at 488 million Canadian dollars, followed by maintenance capital of 47 million Canadian dollars and reclamation costs of 92 million Canadian dollars. The mine plans to provide 2.9 million tons of ore per year to the factory for the first four years, and 2.7 million tons of ore per year for the remaining mine life.

PFS covers a high-end conventional truck and an open-pit mine shovel. The proven and probable reserves are 26.4 million tons, the dilution grade is 3.37 g/ton for gold and 94 g/ton for silver. The mine is designed to provide 2.9 million tons of ore per year to the factory for the first four years, and 2.7 million tons of ore per year for the remaining mine life, for a total of 9.8 years. 7045 tons/day with gravity and flotation capacity will produce precious metal concentrates for sale.

With the gold recovery rate of 84%, the total gold output will exceed 2.4 million ounces. The silver recovery rate is estimated to be 87%, and the total silver production will be 70.9 million ounces.

All maintenance costs are estimated at $548 per ounce of gold. Throughout the life cycle of the Eskay Creek project, Skeena will receive 2.1 billion Canadian dollars in after-tax free cash flow.Editor/GongYan