By Penny Langford
In a transaction that underscores the intensifying demand for Tier-1 precious metals assets in stable jurisdictions, Versamet Royalties has entered into a definitive agreement to acquire a 3.52% gold stream on the Eskay Creek gold-silver project. Located in the heart of British Columbia’s prolific “Golden Triangle,” the project is currently being developed by Skeena Resources Limited.
The $360 million deal is a landmark for Versamet, representing the company’s largest acquisition to date and a significant vote of confidence in the revitalization of one of Canada’s most storied mining districts. For Skeena Resources, the financing provides a critical pillar for the project’s $750 million total funding package, clearing a path toward first production targeted for the second quarter of 2027.
The acquisition comes at a time when the mining industry is grappling with higher capital costs and a rigorous permitting environment. By securing a gold stream rather than traditional debt, developers like Skeena are able to de-risk their balance sheets while offering royalty companies long-term, uncapped exposure to high-margin production.
The Mechanics of the $360 Million Gold Stream
The transaction involves Versamet acquiring the stream from fund entities managed by Orion Resource Partners LP and affiliates of Blackstone Inc. The total consideration of $360 million is structured as $340 million in cash and $20 million in Versamet common shares.
Under the terms of the agreement, Versamet will receive 3.52% of the gold produced from the Eskay Creek project. In exchange, Versamet will make ongoing payments to Skeena equal to 10% of the spot gold price for every ounce delivered. Notably, the stream is uncapped and contains no step-down provisions or buydown options. This structure is particularly advantageous for Versamet, as it ensures the company benefits fully from any future discoveries or mine life extensions beyond the current 12-year plan.
Key Financial Terms of the Transaction
| Component | Detail |
|---|---|
| Total Consideration | $360 Million |
| Cash Component | $340 Million |
| Equity Component | $20 Million (Versamet Shares) |
| Stream Percentage | 3.52% of Gold Production |
| Ongoing Payment | 10% of Spot Gold Price |
| Step-downs/Buydowns | None |
“This acquisition is a transformative step for Versamet,” the company noted in a statement. The deal represents approximately 34% of Versamet’s current market capitalization of $1.05 billion, significantly altering its production profile and increasing its Canadian asset exposure to roughly 50% by 2028.
Eskay Creek: From Historic Producer to Modern Powerhouse
Eskay Creek is not a new name in the world of Canadian mining. During its original run between 1994 and 2008, it was the highest-grade gold mine in the world and a significant silver producer. Skeena Resources is now working to bring the site back online as an open-pit operation, utilizing modern processing techniques to unlock the substantial remaining resource.
The project’s importance to the mining industry cannot be overstated. Located in the Golden Triangle of British Columbia, it sits in a region known for massive mineral endowments but also for its challenging terrain and infrastructure requirements.
As of late February 2026, construction at Eskay Creek was reported to be 49% complete. The project has benefited from existing infrastructure left over from previous operations, including an all-weather access road and proximity to the provincial power grid. However, the move to a large-scale open-pit model requires significant new facility construction, including a dedicated processing plant and waste management systems.
Production Forecast and Strategic Impact
For Versamet, the gold stream translates into immediate and significant attributable production once the mine reaches its commercial stage. According to the current mine plan, Eskay Creek is expected to produce:
- Over 300,000 ounces of gold annually during the first five years of operation.
- An average of 230,000 ounces per year over an initial 12-year mine life.
Versamet is expected to receive over 10,000 ounces of gold annually during those first five years. This will push the company’s total attributable production to over 30,000 gold equivalent ounces (GEOs) per year when Eskay Creek reaches full capacity. This scale of production places Versamet in a new peer group of mid-tier royalty and streaming companies, providing the cash flow necessary to pursue further breaking opportunities in the critical minerals and precious metals sectors.
Financing the Future of Mining in British Columbia
The $360 million stream is a linchpin in Skeena Resources’ broader strategy to fully fund the Eskay Creek development. The company has been assembling a $750 million financing package that includes equity, debt, and streaming components. In an era where traditional bank lending to the mining sector has become more selective, streaming agreements have emerged as a preferred method for junior and mid-tier developers to bridge the gap between exploration and production.
From a strategic standpoint, the involvement of major institutional players like Orion and Blackstone as the initial holders of the stream adds a layer of institutional validation to the project. Versamet’s entry as the long-term holder of the stream suggests that the “de-risking” phase of the project is well underway.
The development of Eskay Creek also aligns with broader national interests. Canada has been vocal about its desire to strengthen its domestic mineral supply chains. While gold is the primary driver here, the project’s silver byproduct and the general infrastructure development in the Golden Triangle support the regional ecosystem that also hosts critical minerals essential for the energy transition.
Operational Timeline and Key Risks
While the financing is a major milestone, the path to first production in Q2 2027 is not without its hurdles. As with any major capital project in the mining review process, several factors could influence the final timeline:
- Labor and Logistics: The Golden Triangle is a remote region. Securing and housing a skilled workforce in a competitive labor market remains a challenge for all operators in the area.
- Inflationary Pressures: While construction is 49% complete, the remaining 51% of CAPEX is still subject to fluctuations in the cost of steel, cement, and energy.
- Permitting and Social License: Skeena has maintained strong relations with First Nations groups, including the Tahltan Nation, whose territory encompasses the project. Continued alignment with indigenous stakeholders is essential for the long-term success of the mine.
Versamet’s management has indicated they are confident in Skeena’s ability to navigate these risks. “Eskay Creek is a rare asset: high grade, located in a premier jurisdiction, and led by a team with a clear track record,” Versamet stated during a recent briefing for the Skillings magazine.
Market Outlook for 2026 and Beyond
The gold market in April 2026 remains robust, supported by geopolitical uncertainty and a shift in central bank reserves toward hard assets. For royalty companies, this environment is ideal. They provide the capital that miners need to build while insulating their own shareholders from the direct operational risks and cost inflation that miners face.
This deal also highlights a trend of consolidation and “rightsizing” within the royalty space. By acquiring a massive stream on a single, high-quality asset, Versamet is signaling a shift toward concentration in “anchor” assets that can provide reliable cash flow for decades.
As the transaction heads toward its expected close in the first half of this month, the focus will shift entirely to the construction site in British Columbia. If Skeena can hit its Q2 2027 target, Eskay Creek will once again become one of the crown jewels of the Canadian mining industry, and Versamet will have secured a cornerstone asset that defines its corporate profile for the next decade.
For more deep-dive analysis on project financing and the evolution of the Golden Triangle, visit our mining industry media section or explore our latest editorial calendar.
