Etruscus Resources Corp. press release

Skeena Completes Robust Feasibility Study for Eskay Creek: After-Tax NPV (5%) of C$1.4B, 50% IRR and 1 Year Payback

2022-09-08

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VANCOUVER, BC / ACCESSWIRE / September 8, 2022 / Skeena Resources Limited(TSX:SKE)(NYSE:SKE) ("Skeena" or the "Company") is pleased to announce the results of the Feasibility Study ("FS") for the Eskay Creek gold-silver project ("Eskay Creek" or the "Project") located in the Golden Triangle of British Columbia.

Eskay Creek 2022 FS Highlights:

After-tax net present value ("NPV") (5%) of C$1.41 billion at a base case of US$1,700 gold and US$19 silver Robust economics with an after-tax internal rate of return ("IRR") of 50.2% and an industry leading after-tax payback on pre-production capital expenditures of 1 year High-grade open-pit averaging 3.87 g/t gold equivalent ("AuEq") (2.99 g/t gold, 79 g/t silver) (diluted) with a strip ratio of 7.5:1 Years 1 - 5 average annual production of 431,000 AuEq ounces, places Eskay Creek as a tier one operation Life of mine ("LOM") production of 3.2 million AuEq ounces from 2.4 million ounces of gold and 66.7 million ounces of silver Estimated pre-production capital expenditures ("CAPEX") of C$592 million, yielding a compelling after-tax NPV:CAPEX ratio of 2.4:1 LOM all-in sustaining cost ("AISC") of US$652/oz AuEq recovered in concentrate Proven and Probable open-pit mineral Reserves of 29.9 million tonnes containing 2.87 million ounces gold and 75.5 million ounces silver (combined 3.85 million AuEq oz) A carbon intensity of 0.20 t CO2e/oz AuEq produced, positioning Eskay Creek to be one of the lowest carbon intensity mines worldwide

The Company will be hosting a conference call to present the FS results for Eskay Creek on Thursday September 8that 8:00 AM PT / 11:00 AM ET. A presentation by management will be followed by Q&A.

Conference Call Webcast and Dial in Details:

Webcast URL with audio- https://services.choruscall.ca/links/skeenaresources202209feas.html

Participant Telephone Numbers- Canada/US 1-800-319-4610, International Toll +1-604-638-5340

Feasibility Study Presentation - https://skeenaresources.com/investors/feasibility-study-presentation/

If you'd like to ask a question, please dial in. All callers should dial in 5-10 minutes prior to the scheduled start time and simply ask to join the call.

Skeena's President, Randy Reichert commented, "The Feasibility Study confirms the robust economics of the world-class Eskay Creek Project originally shown in the Prefeasibility Study but with improved definition. The open-pit mineable, high-grade ore combined with the existing infrastructure at the Eskay Creek site and nearby hydropower provides for an extraordinary project that can be developed by Skeena. While the team continues to work on optimization of the Project, my primary focus will now shift to advancement of the permitting process as we move Eskay Creek toward construction."

Table 1: After-Tax NPV(5%) and IRR Sensitivities to Commodity Prices

| | Even Lower Case | Lower

Case | Base

Case | Higher

Case | Upside

Case | | Gold Price (US$/oz) | $1500 | $1600 | $1700 | $1800 | $1900 | | Silver Price (US$/oz) | $15 | $17 | $19 | $21 | $23 | | After-Tax NPV (5%) (C$M) | $1,044 | $1,228 | $1,412 | $1,596 | $1,780 | | After-Tax IRR(%) | 41.0% | 45.7% | 50.2% | 54.6% | 58.7% | | After-Tax Payback (years) | 1.29 | 1.14 | 1.01 | 0.93 | 0.83 | | After-Tax NPV/Initial Capex | 1.8 | 2.1 | 2.4 | 2.7 | 3.0 | | Average Annual After-TaxFree Cash Flow (Years 1 - 9) (C$M) | $237 | $265 | $293 | $321 | $350 |

Walter Coles, the Company's CEO added, "Eskay Creek is a truly unique deposit that provides excellent profit margins due to its existing infrastructure and very high open-pit grade. Even at US$1,400 gold and US$13 silver prices, the project still generates an average annual after-tax cash flow of C$209 million with an after-tax IRR of 36% and a 1.5 year payback on initial capital."

Eskay Creek Feasibility Study

The FS for Eskay Creek was completed by Ausenco Engineering Canada Inc. ("Ausenco"), supported by SRK Consulting (Canada) ("SRK"), and AGP Mining Consultants ("AGP"). The study confirms robust economics for a conventional open-pit mining and milling operation, with low initial capital cost intensity and a high rate of return. The FS presents a mine plan based on the same strategy first presented in the July 2021 Prefeasibility Study("PFS"), with an updated Mineral Resource and Reserve estimate, refined mine and mill designs supported by additional geotechnical and metallurgical data, and updated capital and operating cost estimates. The Mineral Resource and Reserve updates do not include any new drilling completed since September 2021.

Summary of Key Results and Assumptions in the FS

Table 2: 2022 Eskay Creek FS Project Parameters

| Base Case Economic Assumptions | | | Gold Price (US$/oz) | $1,700 | | Silver Price (US$/oz) | $19 | | Exchange Rate (C$/US$) | 0.76 | | Discount Rate | 5% | | Contained Metals | | | Contained Gold (koz) | 2,874 | | Contained Silver ounces (koz) | 75,538 | | Mining | | | Mine Life (years) | 9 | | Strip Ratio (Waste: Mineralization) | 7.5:1 | | Total Material Mined (excluding rehandle) (Mt) | 255 | | Total Mineralized Material Mined (Mt) | 29.9 | | Processing | | | Processing Throughput (Mtpa) | 3.0 (Yr 1 - 5) | | | 3.7 (Yr 6 - 9) | | Average Diluted Gold Grade (g/t) | 2.99 | | Average Diluted Silver Grade (g/t) | 78.55 | | Production | | | Gold Recovery (%) | 84.2 | | Silver Recovery (%) | 88.3 | | LOM Gold Production (koz) | 2,419 | | LOM Silver Production (koz) | 66,707 | | LOM AuEq Production (koz) | 3,164 | | LOM Avg. Annual Gold Production (koz) | 269 | | LOM Avg. Annual Silver Production (koz) | 7,412 | | LOM Avg. Annual AuEq Production (koz) | 352 | | Operating Costs Per Tonne | | | Mining Cost (C$/t Mined) | $3.72 | | Mining Cost (C$/t Milled) | $30.12 | | Processing Cost (C$/t Milled) | $16.91 | | G&A Cost (C$/t Milled) | $4.20 | | Total Operating Costs (C$/t Milled) | $51.24 | | Other Costs | | | Transport to Smelter (C$/wmt) | $140 | | Royalty (NSR %) | 2.0% | | Cash Costs and All-in Sustaining Costs | | | LOM Cash Cost (US$/oz Au) net of silver by product | $253 | | LOM Cash Cost (US$/oz AuEq) co-product | $572 | | LOM AISC (US$/oz Au) net of silver by-product | $355 | | LOM AISC (US$/oz AuEq) co-product | $652 | | Capital Expenditures | | | Pre-production Capital Expenditures (C$M) | $592 | | Expansion Capital Expenditures (C$M) | $40 | | Sustaining Capital Expenditures (C$M) | $140 | | Closure Expenditures (C$M) | $138 | | Economics | | | After-Tax NPV (5%) (C$M) | $1,412 | | After-Tax IRR | 50.2% | | After-Tax Payback Period (years) | 1.0 | | After-Tax NPV / Initial Capex | 2.4 | | Pre-Tax NPV (5%) (C$M) | $2,094 | | Pre-Tax IRR | 59.5% | | Pre-Tax Payback Period (years) | 0.99 | | Pre-Tax NPV / Initial Capex | 3.5 | | Average Annual After-tax Free Cash Flow (Year 1-9) (C$M) | $293 | | LOM After-tax Free Cash Flow (C$M) | $2,110 |

Cash costs are inclusive of mining costs, processing costs, site G&A and royalties AISC includes cash costs plus corporate G&A, sustaining capital and closure cost All dollar ($) figures are presented in CAD unless otherwise stated. Base case metal prices used in this economic analysis are US$1,700/oz Au and US$19.00/oz Ag. These prices are based on long-term average prices.

Refer to Appendix A below for a comparison of key statistics between the Company's July 2021 PFS and this FS.

Eskay Creek Mineral Resource Estimate

The Company's current Mineral Resource Estimate ("MRE"), completed by SRK, has an effective date of January 18, 2022 and forms the basis for the FS. The MRE does not include drilling results received since September 2021. Mineral Resources are reported inclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability at this time.

Table 3: Pit constrained Mineral Resource Statement reported at 0.7 g/t AuEq cut-off

| | | Grade | Contained Ounces | | | | | | Resource

Class | Tonnes

(Mt) | AuEq (g/t) | Au (g/t) | Ag

(g/t) | AuEq (Moz) | Au (Moz) | Ag

(Moz) | | Measured | 21.8 | 4.8 | 3.5 | 92.4 | 3.4 | 2.5 | 64.7 | | Indicated | 24.7 | 2.3 | 1.8 | 37.6 | 1.8 | 1.4 | 29.9 | | Total M&I | 46.5 | 3.5 | 2.6 | 63.2 | 5.2 | 3.9 | 94.6 |

Results are reported in-situ and undiluted and are considered to have reasonable prospects for economic extraction As defined by NI 43-101, the Independent and Qualified Person is Ms. S. Ulansky, P.Geo. of SRK Consulting (Canada) who has reviewed and validated the Mineral Resource Estimate The effective date of the Mineral Resource Estimate is January 18, 2022 The number of metric tonnes and ounces were rounded to the nearest thousand. Any discrepancies in the totals are due to rounding Pit constrained Mineral Resources are reported in relation to a conceptual pit shell Block tonnage was estimated from average specific gravity measurements using lithology and zone groupings All composites have been capped where appropriate Pit mineral resources are reported at a cut off grade of 0.7 g/t AuEq, cut off grades must be evaluated considering prevailing market conditions Estimates use metric units (metres, tonnes and g/t). Metals are reported in troy ounces (metric tonne * grade /31.10348) CIM definitions were followed for the classification of mineral resources Neither the Company nor SRK is aware of any known environmental, permitting, legal, title-related, taxation, socio-political, marketing or other relevant issue that could materially affect this mineral resource estimate Cut-off grades are based on a price of US$1,700/oz Au, US$23/oz Ag, and gold recoveries of 90%, silver recoveries of 80% and without considering revenues from other metals. AuEq = Au (g/t) + [Ag (g/t) / 74]

Mining Overview

The Eskay Creek Project is planned to be an open-pit operation using conventional mining equipment. The potential for an underground mining component to the Project is still being evaluated. Pit designs were developed for the north and south pit areas. The initial phases were designed for the purpose of obtaining a technical sample and necessary non-acid generating waste material ("NAG") to create supporting infrastructure. Open-pit mining follows down slope of the ridge where the deposit is located and there are no major pushbacks required. The north pit will consist of three main phases, while the south pit will only contain a single small phase.

Table 4: 2022 Eskay Creek Proven and Probable Reserves

| | | Grade | Contained Ounces | | | | | | Reserve

Class | Tonnes

(Mt) | AuEq (g/t) | Au (g/t) | Ag

(g/t) | AuEq (Moz) | Au (Moz) | Ag

(Moz) | | Proven | 17.3 | 4.92 | 3.64 | 99 | 2.73 | 2.02 | 55.1 | | Probable | 12.6 | 2.75 | 2.10 | 50 | 1.12 | 0.85 | 20.5 | | Total | 29.9 | 4.00 | 2.99 | 79 | 3.85 | 2.87 | 75.5 |

Note: This Mineral Reserve Estimate has an effective date of June 30, 2022 and is based on the Mineral Resource estimate dated January 18, 2022 for Skeena Resources by SRK (which has been updated since the PFS). The Mineral Reserve estimate was completed under the supervision of Willie Hamilton, P.Eng. of AGP, who is a Qualified Person as defined under NI 43-101. Mineral Reserves are stated within the final design pit based on a US$1,550/oz gold price and US$20.00/oz silver price. An NSR cut-off of C$24.45/t was used to define reserves based on preliminary processing costs of $18.22/t ore and G&A costs of C$6.23/t ore. The metallurgical recoveries varied according to gold head grade and concentrate grades. Gold and silver recoveries were approximately 83% overall during the LOM scheduling. Final operating costs within the pit design were C$3.72/t mined, with associated process costs of C$16.91/t ore and G&A costs of C$4.20/t ore.

The FS outlines an average production profile of 431,000 AuEq ounces in the first 5 years of operation. It is anticipated that Skeena will have a stockpile developed ahead of mill start-up of approximately 600,000 tonnes of ore.

Graph 1: Eskay Creek LOM Production Profile

Mine planning indicates that the northern end of the north pit will intersect Tom MacKay Creek, requiring the construction of a water diversion tunnel by Year 5 to route the creek flow around the open-pit before re-joining the existing creek downstream. Minimum tunnel dimensions have been selected as 4.7 metres wide by 4.7 metres high to accommodate the expected water flows. The full length of the tunnel is 1.2 kilometres.

The mine schedule plans to deliver 29.9 Mt of mill feed grading 2.99 g/t gold and 78.5 g/t silver over a nine-year period. Waste tonnage from the pits totalling 225 Mt will be placed into either NAG or potentially acid generating waste ("PAG") destinations. The overall strip ratio is 7.5:1.

Metallurgy and Processing

Several metallurgical tests were conducted to further optimize the flow sheet for the FS. The goal of testing for the FS was to improve recoveries of different ore types, primarily Mudstone and Rhyolite, and to optimize the overall flowsheet.

Metallurgical Optimization

As part of the FS, metallurgical testing was conducted on many samples from all ore zones. A total of 57 variability samples were tested on the FS plant flowsheet to confirm its suitability and to measure the variation in Eskay Creek mineralogy and grade on plant performance. In addition, comminution (hardness), dewatering and specialized fine grinding tests were conducted by equipment suppliers to provide additional data for process design.

Testing was conducted on composite samples to determine if grind size targets from the PFS could be coarsened to reduce overall grinding power requirements. Results in FS testing found that it is possible for primary and secondary grind targets to be coarsened without impacting gold recovery, allowing plant grinding equipment to be optimized.

The mill-float-mill-float ("MF2") flowsheet, commonly used in platinum group metals processing, produced anticipated gold and silver recoveries for the samples tested across a wide range of head grades and mineral compositions as well as several composite LOM samples. Refer to Appendix B below for the detailed MF2 flowsheet.

Test work conducted also included variability testing of the main lithologies of Rhyolite and Mudstone. Test results indicated that reduced metallurgical performance was more often related to Mudstone material, which represents approximately 24% of the mill feed. The metallurgical performance of Mudstone samples was found to improve with changes in regrinding and flotation reagent dosages. As a result of this test program, a more robust model for gold recovery related to feed characteristics of these rock types was developed, as compared to the global recovery model developed in the PFS. Test work on blends of Rhyolite and Mudstone showed that combined recoveries could be estimated by rock type and weighting against blend fractions.

Rhyolite and Mudstone material blends demonstrated gold recovery ranges from 86% to 75% across the LOM as the head grade drops from 4.5 g/t gold to 1.1 g/t gold at the end of the mine life. The weighted average gold recovery was 84.2% over LOM. The targeted final concentrate grade was 35 g/t gold.

At 88.3%, average silver recovery was higher than gold recovery, which could be due to an association with galena and its favourable liberation and flotation kinetics. Individual rock type models were developed that relate silver recovery to silver feed grades. The resulting LOM silver recoveries were somewhat improved over the PFS.

Processing Overview

The process flowsheet in the FS is substantively the same as the PFS flow sheet. In Years 1 through 5, 3.0 million tonnes per annum ("Mtpa") will be processed. A pebble crusher will be added in Year 3 to maintain production when harder ore is processed in Year 4. An expansion will be completed in Year 5 to increase processing capacity to 3.7 Mtpa when harder and lower grade ore is processed starting in Year 6. The expansion will include a secondary crushing circuit, additional ball mill, additional flotation capacity and an addition of a fine grinding mill in the secondary grinding circuit.

Run-of-mine ("ROM") material is trucked from the open-pits and either stockpiled or directly fed into the primary crusher. Primary crushed feed material is in turn conveyed to the mill facility and stacked onto a coarse ore stockpile.

The ROM material is considered relatively competent with Bond Rod and Ball Mill Work Indices of between 14.1 kWh/t in the early years of the mine life through to 24 kWh/t later in the mine life as the 22 Zone material is more competent. To achieve the target primary particle P80 (80% passing) size of between 100 µm and 212 µm, the comminution circuit is comprised of a 4.4 MW semi-autogenous grinding ("SAG") mill with a 7.6 m diameter by 4.3 m effective grinding length ("EGL"), and a 5.8 MW ball mill with a 6.1 m diameter by 8.5 m EGL.

Ground material is processed through a split flotation circuit consisting of roughers, scavengers, fines roughers, cleaners, and fines cleaner flotation, along with regrinding of rougher concentrate, slimes classification of rougher tailings and secondary grinding prior to scavenger flotation. Rougher concentrate is re-ground to a target P80 size of 15 µm and slimes classification underflow undergoes secondary grinding to a target P80 size of 35 µm, prior to flotation and multiple stages of cleaning to produce a combined gold-silver concentrate with the slimes circuit concentrate.

Flotation concentrate is thickened, filtered and if necessary, dried, to a transportable moisture limit of less than 13% and trucked to a nearby port for loading onto ships for transportation to third-party smelters worldwide.

Tailings and PAG waste rock will be stored in the existing permitted Tom MacKay Storage Facility. Over the life of the project, four small embankments will be constructed in phases to store 26.4 Mt of tailings and 81 Mt of PAG waste rock sub-aqueously to prevent generation of acid and metal leaching. The facility is designed in accordance with Canadian Dam Association guidelines (2019) and Part 10 of the Health, Safety and Reclamation Code for Mines in British Columbia (2016).

Concentrate Marketing Studies

Multiple marketing assessments have been completed by Open Mineral AG to support the FS, which indicate that the Eskay Creek concentrate is readily saleable at a target grade of 35 g/t Au. Preliminary contract terms for the concentrate have been provided by Asian smelters, with multiple offtake alternatives available. Smelters and traders within Europe have also provided draft term sheets, and these have been identified as potential markets. The Company has been offered several preliminary term sheets for all concentrate production. These have been used as the basis for the financial model which includes gold and silver payables, industry standard treatment and refining charges, and penalties for impurities. Blending opportunities for the Eskay Creek concentrate have also been assessed as part of the FS and support improved payability. For the purposes of the FS, smelter payables average 86% for gold and 80% for silver, not including penalties of C$53 million.

Capital Costs

The initial capital cost of $592M (US$451M) represents a 21% increase compared to the July 2021 PFS estimate. In order to expand the process plant in Year 5 to accommodate additional throughput, C$39.7M will be invested in expansion capital costs. The increases in initial capital cost reflect inflationary trends in labour and materials costs experienced in the past year. The two main areas of capital cost increase on the Project were in the process plant and related to infrastructure. The capital cost increase associated with the process plant (+53%) was due to inflationary effects in material, labour and contractors' costs, some increase in the sizing of the grinding circuit area coupled with the heightened level of engineering definition. The capital cost for infrastructure also increased (+30%) due to higher costs for the Tom MacKay Storage Facility, power supply and costs associated with last year's geotechnical drilling on site. Again, the unique nature of Eskay Creek was demonstrated by modest capital cost increases in the current inflationary environment mitigated by existing infrastructure and site works.