Mr. Walter Coles reports

SKEENA RESOURCES SECURES US$750 MILLION PROJECT FINANCING PACKAGE

Skeena Resources Ltd. has secured a financing package totalling $750-million (U.S.) (equivalent to over $1-billion (Canadian)) with Orion Resource Partners for the development, construction and general working capital required to advance the company's 100-per-cent-owned Eskay Creek gold-silver project. This complete financing package significantly derisks the project, and provides Skeena with optionality, flexibility and stakeholder alignment as the company progresses Eskay toward production in the first half of 2027. The package provides a significant portion of financing prior to Skeena's receipt of required permits in respect to the Eskay project and, therefore, allows the company to advance the project on the most efficient and expedient schedule to production.

Financing package highlights

The total financing package of $750-million (U.S.) is composed of an equity investment, gold stream, senior secured loan and a cost overrun facility:

• $100-million (U.S.) equity investment priced at a meaningful premium to the company's five-day volume-weighted average share price;
• $200-million (U.S.) gold stream with option to buy back up to 66.7 per cent for 12-month period after start of commercial production;
• $350-million (U.S.) of committed capital available from a senior secured loan with 1-per-cent standby fee and no break fee;
• $100-million (U.S.) cost overrun facility in the form of an additional gold stream subject to the same standby terms as the senior secured loan.

Walter Coles, executive chairman of Skeena, commented: "This complete financing package is a result of a competitive and comprehensive process undertaken to find the best financing solution for the company. The result is certainty of funding to advance Eskay into production while balancing attractive cost of capital, flexibility and optionality. We welcome Orion alongside existing shareholders as an aligned and committed stakeholder, further validating the merits of the project.

"We designed the financing package to provide the company with important strategic flexibility and significant funding prior to final permits, while maintaining optionality as we continue working to maximize stakeholder value by advancing the project. On the back of our positive definitive feasibility study released in November, 2023, this financing package lays the foundation on which we build Eskay -- unlocking value for all our stakeholders as we progress through this stage of growth."

Equity investment -- $100-million (U.S.):

• Orion has committed to purchase $100-million (U.S.) of Skeena's common shares with a portion of the equity commitment priced and closing immediately and the balance ($25-million (U.S.)) closing at a later date:
  • Orion was the back-end buyer of a $100-million (Canadian) development flow-through private placement transaction, in which Skeena issued 12,021,977 shares at a price of $8.32 (Canadian) per share, which closed on June 24, 2024.
  • Orion also purchased 3,418,702 common shares priced at $6.65 (Canadian) per share ($22.75-million (Canadian)/$16.6-million (U.S.)), which closed on June 24, 2024.
  • The balance of Orion's equity investment commitment into Skeena is expected to close later this year with pricing to be set at the time of the investment.
• Upon completion of the full $100-million (U.S.) equity investment, Orion will own less than 20 per cent of the issued and outstanding shares of the company.
• Orion will have the right to participate in any future equity or equity-linked offerings by Skeena up to the level of its ownership at the time of the offering provided that Orion continues to own at least 5 per cent of the basic shares outstanding of the company.
• The shares of Skeena issued in connection with the equity investment are subject to a customary four-month hold period under applicable securities law in Canada. In addition, until the earlier of: (i) 12 months after the closing date; or (ii) the termination of the senior secured loan or gold stream, Orion has agreed to not transfer its Skeena common shares without approval from Skeena's board of directors.

Gold stream -- $200-million (U.S.):

• Gold stream agreement to be drawn in five tranches:
  • The initial tranche of $5-million (U.S.) is anticipated to close on June 26, 2024.
  • The second tranche of $45-million (U.S.) will be available after receipt of the technical sample permit.
  • The next three tranches of $50-million (U.S.) are available as needed to support the project construction schedule.
• Once the stream is fully drawn, Orion will be entitled to receive 10.55 per cent of payable gold produced from the mine at a price equal to 10 per cent of the London Bullion Market Association AM gold fixing price three days prior to the delivery day for the life of mine of the project.
• The silver production is not subject to the stream agreement.
• For a period of 12 months following the project completion date, Skeena may, at any time, reduce the stream percentage by 66.67 per cent by repaying Orion the proportional deposit plus an imputed 18-per-cent internal rate of return.
• The area of interest for the stream is constrained to 500 metres around the existing mineral reserves and resources currently delineated at the project.

Senior secured loan: $350-million (U.S.):

• Term: 5.75 years from the first drawdown;
• Availability period: drawdowns will be in four equal tranches of $87.5-million (U.S.);
• Availability fee: 1.0 per cent per year on the undrawn portion;
• Coupon: three-month U.S.-dollar secured overnight financing rate (subject to a minimum of 1.5 per cent) plus 7.75-per-cent margin, calculated based on the number of days elapsed in the quarter divided by 360 days; in the case of default, the margin will increase by 2 per cent;
• Interest and principal repayment: interest to be paid quarterly until the maturity date; commencing three months following the planned project completion, the principal shall amortize and be payable in 15 quarterly instalments; Skeena may prepay the loan and any accrued unpaid interest in full or in part at any time without any penalty;
• Original issue discount: 2.0 per cent of the senior secured loan amount, which shall be paid pro rata upon the financing of each tranche;
• No break fee: Skeena may terminate the senior secured loan at any time without incurring penalties.

Cost overrun facility: $100-million (U.S.):

• Skeena may request an additional $100-million (U.S.) deposit with the same pro rata terms as the gold stream other than being subject to a 2-per-cent original issue discount and a 1-per-cent availability fee.

Conclusion: fully financed

The company's definitive feasibility study, released in November, 2023, estimated Eskay's preproduction capital expenditures to be $528-million (U.S.) ($713-million (Canadian)), including a $36-million (U.S.) ($49-million (Canadian)) contingency.

The total financing package of $750-million (U.S.), combined with $44-million (U.S.) ($59-million (Canadian)) of cash and cash equivalents as of March 31, 2024, provides Skeena with approximately $794-million (U.S.) of available capital toward the project, which is substantially more than the remaining estimated capital expenditures required to bring Eskay back into production. With no precious metal hedging or concentrate offtake requirements, the company retains excellent upside to increasing metal prices.

Eskay timeline

The Skeena management team is focused on advancing the project in a disciplined manner. With project financing committed, the company is now working to finalize the 2024 early works programs and detailed engineering plans. Proceeding with the early works program will mitigate timing pressures as Skeena completes the environmental assessment and permitting process. Coming development milestones target dates include:

• Impact benefit agreement with the Tahltan Central government, expected in first half 2025;
• Receiving all remaining permits required for full-scale construction and operation of the mine anticipated by the end of 2025;
• Initiating full-scale construction in 2026, subject to receiving all the required permits and following construction;
• Projecting initial production at Eskay Creek in first half 2027.

Community benefit

Skeena has always prioritized community engagement and collaboration as crucial elements for ensuring the success of the project. Skeena acknowledges that its social licence to operate must be strongly supported by collaboration and investment in its partnership with the Tahltan Nation.

During 2023, Skeena continued investing in the social and economic well-being of the local communities:

• Within British Columbia, $75-million (Canadian) was invested, with over 58 per cent toward wages, services providers and small businesses in the northwest of the province.
• Employment totalled 431 full-time jobs in British Columbia with projections to significantly increase the work force as development ramps up.
• The work force is 12 per cent indigenous with representation at nearly all levels of the organization.
• Tahltan affiliated businesses received $43-million (Canadian) in contracts.

To date, the project has created over $180-million (Canadian) in wages, contracts and community contributions for Tahltan-related companies and organizations. Skeena is projecting a further potential $700-million (Canadian) in contracts to Tahltan businesses throughout the life of the mine.

This mine will provide significant long-term value for both the national and local economies. The company always prioritizes hiring local employees and local suppliers wherever possible. The project will create over 800 direct jobs and potentially 2,000 jobs for outside service and contract organizations. The project is expected to contribute roughly $1.5-billion (Canadian) in direct tax revenue to British Columbia and Canada over the life of the mine.

The company is confident that through further exploration on Skeena's vast property package, the mine life for Eskay will likely be extended beyond the current estimated mine life of 12 years, providing steady employment and long-term jobs to be filled by members of the local communities of northwestern British Columbia.

About Skeena Resources Ltd.

Skeena is a fully financed leading gold developer that is focused on advancing the Eskay Creek gold-silver project and the Snip gold project -- two past-producing mines located in the renowned Golden Triangle in British Columbia, Canada. Eskay Creek represents one of the highest-grade and lowest-cost open-pit precious metal mines in the world, with substantial silver byproduct production that surpasses many primary silver mines. Skeena is committed to sustainable mining practices and maximizing the potential of its mineral resources. In partnership with the Tahltan First Nation, Skeena strives to foster positive relationships with indigenous communities while delivering long-term value and sustainable growth for its stakeholders.

Qualified person

In accordance with National Instrument 43-101 (Standards of Disclosure for Mineral Projects), Paul Geddes, PGeo, senior vice-president, exploration and resource development, is the qualified person for the company, and has prepared, validated and approved the technical and scientific content of this news release. The company strictly adheres to Canadian Institute of Mining, Metallurgy and Petroleum best practice guidelines in conducting, documenting and reporting the exploration activities on its projects.

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