Scotia initiates coverage
...with a one-year target price of $17. That $17 is their estimate of discounted cash flow, mining starting in 2026.
One fly in the ointment is a frustrating lack of an estimate of equity required to fund US$483 million capex, 27% higher than the US$381 mm used iin the July '21 pre-feasibility study. So their denominator uses 74 million shares, as far as I can see on quick read-thru.
Scotia points out Eskay's low cost operation and exploration upside - they're using 3.8 million ounces. These attributes create "a suitable target for a major or mid-cap producer looking to augment its production profile with low-cost ounces in a preferential jurisdiction." [Are you listening, Centerra? How 'bout you, SSR Mining???]
I don't know if the numbers are accurate, but the report makes pleasant reading when it compares the take-out numbers for Pretium: "The deal terms implied a valuation of ~US$720/oz of proven and probable reserves (3.9 Moz Au at 8.5g/t Au and 29.6 Moz Ag), or ~US$390/oz of M & I resources (7.2 Moz Au and 48.8 Moz Ag). Applying these valuations to Skeena implies an acquisition value of ~$2.6 billion (~$38.00 per share) using reserves and ~$1.9 billion (~$27.50 per share) using M&I reources, which we believe further underscores upside potential."
I would point out that ~$2.6 billion divided by 74 million shares is more like ~$35.14 but hey, why quibble?