Versamet Royalties announced it has entered into a definitive agreement to acquire a 3.52% gold stream on the Eskay Creek project in British Columbia, marking its largest transaction to date. The deal, valued at $360 million, includes $340 million in cash and $20 million in shares.
The gold stream is being acquired from funds managed by Orion Resource Partners LP and affiliates of Blackstone Inc.. The underlying Eskay Creek project is owned by Skeena Resources Limited and is expected to become one of the highest-grade, lowest-cost open-pit precious metals mines globally.
The transaction significantly increases Versamet’s exposure to gold and strengthens its position in Canada, with attributable gold equivalent ounces expected to exceed 30,000 annually once the mine reaches full capacity. The project is currently 49% complete, with first production targeted for Q2 2027.
The gold stream provides Versamet with 3.52% of payable gold production over the life of the mine, with no caps, step-downs, or buyback provisions. The company will pay 10% of the spot gold price for delivered ounces. The stream also includes provisions to increase the percentage if project completion is delayed beyond September 2027.
Eskay Creek is expected to produce more than 300,000 ounces of gold annually during its first five years and approximately 230,000 ounces per year over its initial 12-year life. Historically, the site was one of the world’s highest-grade precious metals mines, producing 3.3 million ounces of gold and 160 million ounces of silver between 1994 and 2008.
Versamet expects the stream to contribute over 10,000 ounces of gold annually in the first five years of production. The acquisition also supports a broader portfolio shift, with approximately 50% of the company’s attributable production projected to come from Canada by 2028.
To fund the transaction, Versamet has secured an amended credit facility totaling $400 million, including a $250 million revolving facility and a $150 million term loan, provided by Bank of Montreal and National Bank of Canada.
Following the transaction, Versamet will hold seven producing royalties and streams, with three additional assets expected to begin production by the end of 2027. The company anticipates generating 20,000 to 23,000 attributable gold equivalent ounces in 2026, with approximately 85% of revenue derived from gold and silver.
KEY QUOTE:
“This acquisition marks a significant step-change in Versamet’s scale, adding a large, uncapped gold stream on what is expected to become one of the highest-grade, lowest-cost open-pit precious metals mines globally, located in a premier Canadian jurisdiction. The addition of this robust gold stream is expected to materially increase our attributable production to over 30,000 gold equivalent ounces annually when Eskay reaches full capacity. As our largest acquisition to date, this transaction further enhances the quality and durability of our portfolio while maintaining exposure to meaningful exploration and expansion upside and is consistent with our focus on executing disciplined, accretive growth to drive long-term value for our shareholders.”
Dan O’Flaherty, CEO of Versamet Royalties Corporation
