[Condensed Interim Consolidated Financial Statements](index=1&type=section&id=Condensed%20Interim%20Consolidated%20Financial%20Statements) [Condensed Interim Consolidated Statements of Financial Position](index=2&type=section&id=CONDENSED%20INTERIM%20CONSOLIDATED%20STATEMENTS%20OF%20FINANCIAL%20POSITION) As of September 30, 2023, Skeena Resources Limited reported an increase in total assets and shareholders' equity compared to December 31, 2022, primarily driven by growth in exploration and evaluation interests and capital stock. Current liabilities also saw a significant increase | Metric | September 30, 2023 (CAD thousands) | December 31, 2022 (CAD thousands) | | :--------------------------------- | :----------------------------------- | :----------------------------------- | | **ASSETS** | | | | Cash and cash equivalents | 38,004 | 40,602 | | Total Current Assets | 47,531 | 50,124 | | Exploration and evaluation interests | 107,849 | 95,438 | | Capital assets | 25,517 | 20,236 | | **Total assets** | **184,647** | **167,980** | | **LIABILITIES** | | | | Accounts payable and accrued liabilities | 31,403 | 13,977 | | Total Current Liabilities | 35,236 | 20,885 | | Total liabilities | 44,244 | 30,753 | | **SHAREHOLDERS' EQUITY** | | | | Capital stock | 539,496 | 464,029 | | Deficit | (443,955) | (367,931) | | **Total shareholders' equity** | **140,403** | **137,227** | - Total assets increased by **CAD 16,667 thousand (9.9%)** from December 31, 2022, to September 30, 2023, primarily due to higher exploration and evaluation interests and capital assets[2](index=2&type=chunk) - Total liabilities increased by **CAD 13,491 thousand (43.9%)** over the nine-month period, largely driven by an increase in accounts payable and accrued liabilities[2](index=2&type=chunk) [Condensed Interim Consolidated Statements of Loss and Comprehensive Loss](index=3&type=section&id=CONDENSED%20INTERIM%20CONSOLIDATED%20STATEMENTS%20OF%20LOSS%20AND%20COMPREHENSIVE%20LOSS) Skeena Resources Limited reported an increased loss for both the three and nine months ended September 30, 2023, compared to the same periods in 2022, primarily due to higher exploration and evaluation expenses and administrative compensation | Metric | Three months ended Sep 30, 2023 (CAD thousands) | Three months ended Sep 30, 2022 (CAD thousands) | Nine months ended Sep 30, 2023 (CAD thousands) | Nine months ended Sep 30, 2022 (CAD thousands) | | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Administrative compensation | 1,498 | 1,682 | 4,309 | 3,454 | | Exploration and evaluation | 38,170 | 28,985 | 63,899 | 71,944 | | Share-based payments | 2,042 | 1,965 | 6,554 | 5,037 | | **Loss and comprehensive loss for the period** | **(39,795)** | **(28,778)** | **(76,024)** | **(72,481)** | | Loss per share – basic and diluted | (0.45) | (0.41) | (0.92) | (1.06) | | Weighted average number of common shares outstanding | 88,203,855 | 70,227,095 | 82,794,872 | 68,384,529 | - Loss for the three months ended September 30, 2023, increased to **CAD 39,795 thousand** from CAD 28,778 thousand in the prior year, primarily due to a significant increase in exploration and evaluation expenses[4](index=4&type=chunk) - Loss per share for the nine months ended September 30, 2023, improved to **CAD (0.92)** from CAD (1.06) in the prior year, despite a higher total loss, due to an increase in the weighted average number of common shares outstanding[4](index=4&type=chunk) [Condensed Interim Consolidated Statements of Changes in Shareholders' Equity](index=4&type=section&id=CONDENSED%20INTERIM%20CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20SHAREHOLDERS'%20EQUITY) Shareholders' equity increased from CAD 137,227 thousand at December 31, 2022, to CAD 140,403 thousand at September 30, 2023. This increase was primarily driven by a significant bought deal offering, partially offset by the loss for the period and share issue costs | Metric | Balance Dec 31, 2022 (CAD thousands) | Bought deal offering (CAD thousands) | Loss for the period (CAD thousands) | Balance Sep 30, 2023 (CAD thousands) | | :----------------------- | :----------------------------------- | :----------------------------------- | :---------------------------------- | :----------------------------------- | | Capital Stock | 464,029 | 73,537 | — | 539,496 | | Reserves | 39,879 | — | — | 43,862 | | Deficit | (367,931) | — | (76,024) | (443,955) | | **Total Shareholders' Equity** | **137,227** | **73,537** | **(76,024)** | **140,403** | - A bought deal offering on May 24, 2023, raised gross proceeds of **CAD 73,537 thousand** through the issuance of 10,005,000 common shares[54](index=54&type=chunk) - Share issue costs of **CAD 4,076 thousand** were incurred in connection with the May 2023 bought deal offering[54](index=54&type=chunk) [Condensed Interim Consolidated Statements of Cash Flows](index=5&type=section&id=CONDENSED%20INTERIM%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the nine months ended September 30, 2023, Skeena Resources Limited significantly reduced cash used in operating activities and saw a substantial increase in cash provided by financing activities, primarily from a bought deal offering. Cash used in investing activities increased due to higher exploration and evaluation asset expenditures | Activity | Nine months ended Sep 30, 2023 (CAD thousands) | Nine months ended Sep 30, 2022 (CAD thousands) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net cash used in operating activities | (53,404) | (65,364) | | Net cash used in investing activities | (19,143) | (12,702) | | Net cash provided by financing activities | 69,949 | 64,942 | | Change in cash and cash equivalents | (2,598) | (13,124) | | Cash and cash equivalents, end of period | 38,004 | 27,189 | - Net cash used in operating activities decreased by **CAD 11,960 thousand** for the nine months ended September 30, 2023, compared to the same period in 2022[8](index=8&type=chunk) - Net cash provided by financing activities increased by **CAD 5,007 thousand** for the nine months ended September 30, 2023, primarily due to proceeds from a bought deal financing of CAD 73,537 thousand[8](index=8&type=chunk) [Notes to the Condensed Interim Consolidated Financial Statements](index=6&type=section&id=NOTES%20TO%20THE%20CONDENSED%20INTERIM%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) The notes provide detailed explanations of the company's operations, accounting policies, financial instruments, exploration activities, capital assets, related party transactions, capital structure, and subsequent events, offering crucial context to the condensed interim consolidated financial statements [1. Nature of Operations](index=6&type=section&id=1.%20NATURE%20OF%20OPERATIONS) Skeena Resources Limited is primarily engaged in mineral property exploration in British Columbia, Canada. The company relies on share issuances for funding and aims to bring its Eskay Creek project to profitable operation, with current cash sufficient for committed expenditures for at least the next twelve months - Skeena Resources Limited's principal business activity is the exploration of mineral properties, primarily in British Columbia[11](index=11&type=chunk) - As of September 30, 2023, the Company had cash and cash equivalents of **CAD 38,004,000**, which is expected to fund committed exploration and evaluation expenditures and general administrative costs for at least the next twelve months[12](index=12&type=chunk) - The Company's long-term ability to continue as a going concern depends on the successful execution of its business plan, including bringing the Eskay Creek project to profitable operation, raising additional capital, or evaluating strategic alternatives[12](index=12&type=chunk) [2. Basis of Presentation](index=6&type=section&id=2.%20BASIS%20OF%20PRESENTATION) These unaudited condensed interim consolidated financial statements are prepared in accordance with IAS 34 and are consistent with the accounting policies applied in the Company's audited annual consolidated financial statements for the year ended December 31, 2022 - The financial statements are prepared in accordance with International Accounting Standard 34, Interim Financial Reporting (IAS 34)[14](index=14&type=chunk) - Accounting policies are consistent with those applied in the Company's audited annual consolidated financial statements as at and for the year ended December 31, 2022[15](index=15&type=chunk) [3. New Standards, Amendments and Interpretations Adopted](index=7&type=section&id=3.%20NEW%20STANDARDS,%20AMENDMENTS%20AND%20INTERPRETATIONS%20ADOPTED) The Company adopted amendments to IAS 1 regarding disclosure of material accounting policies, with no material impact. Future amendments to IAS 1 (non-current liabilities with covenants) and IAS 7/IFRS 7 (supplier finance arrangements) are being assessed, with IAS 1 amendments expected to have no material impact - Amendments to IAS 1, 'Disclosure of Accounting Policies,' effective January 1, 2023, had no material impact on the Company's consolidated financial statements[19](index=19&type=chunk) - Amendments to IAS 1, 'Presentation of Financial Statements,' regarding non-current liabilities with covenants, effective January 1, 2024, are expected to have no material impact[21](index=21&type=chunk) - The Company is currently assessing the potential disclosure requirements of amendments to IAS 7 and IFRS 7 related to supplier finance arrangements, effective January 1, 2024[24](index=24&type=chunk) [4. Financial Instruments and Risk Management](index=8&type=section&id=4.%20FINANCIAL%20INSTRUMENTS%20AND%20RISK%20MANAGEMENT) The Company's financial instruments include cash, marketable securities, receivables, deposits, and payables. Marketable securities are measured at fair value through profit or loss. The Company is exposed to market risk, particularly from marketable securities, and manages liquidity risk by forecasting cash flows and reviewing expenditures | Financial Instrument | Category | September 30, 2023 (CAD thousands) | December 31, 2022 (CAD thousands) | | :------------------- | :--------------- | :--------------------------------- | :--------------------------------- | | Cash and cash equivalents | Amortized cost | 38,004 | 40,602 | | Marketable securities | Fair value through profit or loss | 2,012 | 2,494 | | Accounts payable | Amortized cost | 20,991 | 10,209 | - Marketable securities are measured using Level 1 inputs (unadjusted quoted prices) for most, while warrants and contingent consideration receivable use Level 3 inputs (unobservable market data)[26](index=26&type=chunk) - A **10% decrease** in the share price of marketable securities at September 30, 2023, would result in a **CAD 201,000** decrease to their carrying value and an increase in unrealized loss[30](index=30&type=chunk) [5. Exploration and Evaluation Interests](index=9&type=section&id=5.%20EXPLORATION%20AND%20EVALUATION%20INTERESTS) Exploration and evaluation assets increased to CAD 107,849 thousand at September 30, 2023, from CAD 95,438 thousand at December 31, 2022, primarily due to additions at the Eskay Creek Property. The Company incurred significant exploration and evaluation expenses, with Eskay Creek being the largest contributor | Property | Balance, Dec 31, 2022 (CAD thousands) | Additions (CAD thousands) | Balance, Sep 30, 2023 (CAD thousands) | | :--------- | :------------------------------------ | :------------------------ | :------------------------------------ | | Eskay | 78,488 | 12,626 | 91,667 | | KSP | 7,872 | — | 7,872 | | Kingpin | 3,936 | — | 3,936 | | Red Chris | 2,871 | — | 2,871 | | Snip | 959 | — | 191 | | Sofia | 1,312 | — | 1,312 | | **Total** | **95,438** | **12,626** | **107,849** | - During the nine months ended September 30, 2023, the Company incurred **CAD 8,626 thousand** relating to earthworks for mine-related infrastructures at Eskay Creek, which are capitalized to exploration and evaluation interests[38](index=38&type=chunk) | Expense Category | Nine months ended Sep 30, 2023 (CAD thousands) | Nine months ended Sep 30, 2022 (CAD thousands) | | :----------------------- | :--------------------------------------------- | :--------------------------------------------- | | Drilling | 11,964 | 11,841 | | Environmental studies | 13,200 | 5,125 | | Geology, geophysics, and geochemical | 15,091 | 15,353 | | **Total for the period** | **63,899** | **71,944** | [6. Capital Assets](index=13&type=section&id=6.%20CAPITAL%20ASSETS) During the nine months ended September 30, 2023, the Company invested CAD 4,851 thousand in the construction of a modular analytical laboratory at Eskay Creek and CAD 1,554 thousand in leasehold improvements for a new office space - **CAD 4,851 thousand** was incurred for the construction of a modular analytical laboratory at Eskay Creek during the nine months ended September 30, 2023[46](index=46&type=chunk) - **CAD 1,554 thousand** was incurred for leasehold improvements towards a new office space during the nine months ended September 30, 2023[46](index=46&type=chunk) [7. Related Party Transactions](index=13&type=section&id=7.%20RELATED%20PARTY%20TRANSACTIONS) Key management compensation, including director and officer remuneration and share-based payments, totaled CAD 8,867 thousand for the nine months ended September 30, 2023. The Company also had accounts payable of CAD 1,213 thousand due to key management personnel at September 30, 2023 | Compensation Type | Nine months ended Sep 30, 2023 (CAD thousands) | Nine months ended Sep 30, 2022 (CAD thousands) | | :------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Director remuneration | 258 | 744 | | Officer & key management remuneration | 2,541 | 2,728 | | Termination benefits | 675 | — | | Share-based payments | 6,033 | 4,920 | | **Total Key Management Compensation** | **8,867** | **8,392** | - Share-based payment expenses for key management personnel increased to **CAD 6,033 thousand** for the nine months ended September 30, 2023, from CAD 4,920 thousand in the prior year[47](index=47&type=chunk) - Included in accounts payable and accrued liabilities at September 30, 2023, is **CAD 1,213 thousand** due to key management personnel[52](index=52&type=chunk) [8. Capital Stock and Reserves](index=14&type=section&id=8.%20CAPITAL%20STOCK%20AND%20RESERVES) The Company completed a bought deal public offering in May 2023, raising CAD 73,537 thousand. It also adopted the 2023 Omnibus Equity Incentive Plan and granted various share-based payments, including stock options, Restricted Share Units (RSUs), and Deferred Share Units (DSUs), with a total of 4,597,505 stock options and 1,934,502 RSUs outstanding at September 30, 2023 - On May 24, 2023, the Company closed a bought deal public offering, raising gross proceeds of **CAD 73,537 thousand** by issuing 10,005,000 common shares[54](index=54&type=chunk) - During the nine months ended September 30, 2023, Milestone 1 of the Tahltan Investment Rights was met, converting **119,785 Rights** into common shares valued at **CAD 1,500,000**[56](index=56&type=chunk) | Instrument | Outstanding, Dec 31, 2022 (Units) | Granted (9M 2023) (Units) | Exercised (9M 2023) (Units) | Cancelled (9M 2023) (Units) | Outstanding, Sep 30, 2023 (Units) | | :----------- | :------------------------ | :------------------ | :------------------ | :------------------ | :------------------------ | | Warrants | 12,823 | — | (9,657) | (3,166) | — | | RSUs | 1,835,821 | 607,750 | (315,853) | (193,216) | 1,934,502 | | DSUs | — | 11,755 | — | — | 11,755 | | Stock Options | 5,033,425 | 155,151 | (267,524) | (323,547) | 4,597,505 | [9. Supplemental Disclosure with Respect to Cash Flows](index=18&type=section&id=9.%20SUPPLEMENTAL%20DISCLOSURE%20WITH%20RESPECT%20TO%20CASH%20FLOWS) Non-cash transactions for the nine months ended September 30, 2023, included CAD 1,628 thousand in capital asset additions in accounts payable and accrued liabilities, and CAD 1,796 thousand in deposits reclassified to capital assets. No payments were made for interest or income taxes during these periods | Non-Cash Transaction | Nine months ended Sep 30, 2023 (CAD thousands) | Nine months ended Sep 30, 2022 (CAD thousands) | | :--------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Capital asset additions in accounts payable and accrued liabilities | 1,628 | 298 | | Deposits reclassified to capital assets | 1,796 | — | | Share issue costs in accounts payable and accrued liabilities | — | 552 | - The Company did not make any payments towards interest or income taxes during the three and nine months ended September 30, 2023 and 2022[83](index=83&type=chunk) [10. Contingencies](index=19&type=section&id=10.%20CONTINGENCIES) The Company accrues liabilities for legal and tax matters when the amount can be reasonably estimated, and settlement is probable to require an outflow of future economic benefits - The Company accrues legal and tax matters as liabilities when the amount can be reasonably estimated and settlement is probable to require an outflow of future economic benefits[85](index=85&type=chunk) [11. Other Subsequent Events](index=19&type=section&id=11.%20OTHER%20SUBSEQUENT%20EVENTS) Subsequent to September 30, 2023, the Company closed a non-brokered private placement offering, raising CAD 4,541 thousand, and conditionally granted performance-linked options and PSUs to officers, employees, and consultants, with a maximum of 330,000 options and 770,000 PSUs - On October 10, 2023, the Company closed a non-brokered private placement offering, raising gross proceeds of **CAD 4,541 thousand** through the issuance of flow-through shares[86](index=86&type=chunk) - On October 12, 2023, the Company conditionally granted performance-linked options (maximum **330,000**) and PSUs (maximum **770,000**) to officers, employees, and consultants, contingent on the Eskay Creek Definitive Feasibility Study results and ESG-linked criteria[87](index=87&type=chunk)

```markdown [Condensed Interim Consolidated Financial Statements](index=2&type=section&id=Financial%20Statements%20Overview) This section presents the unaudited interim financial statements, including statements of financial position, loss, changes in equity, and cash flows for the specified periods [Condensed Interim Consolidated Statements of Financial Position](index=2&type=section&id=CONDENSED%20INTERIM%20CONSOLIDATED%20STATEMENTS%20OF%20FINANCIAL%20POSITION) The Company's total assets increased by **21%** to **$203,150 thousand** as of June 30, 2023, from **$167,980 thousand** at December 31, 2022, primarily driven by a significant increase in cash and cash equivalents, while total liabilities decreased by **16%** and total shareholders' equity rose by **29%** Condensed Interim Consolidated Statements of Financial Position (in thousands of Canadian dollars) | Item | June 30, 2023 | December 31, 2022 | | :--------------------------------- | :------------ | :---------------- | | **ASSETS** | | | | Cash and cash equivalents | $73,446 | $40,602 | | Marketable securities | $1,793 | $2,494 | | Receivables | $4,868 | $5,682 | | Prepaid expenses (current) | $2,239 | $1,346 | | Exploration and evaluation interests | $95,938 | $95,438 | | Capital assets | $22,439 | $20,236 | | **Total assets** | **$203,150** | **$167,980** | | **LIABILITIES** | | | | Accounts payable and accrued liabilities | $12,491 | $13,977 | | Current portion of lease liabilities | $569 | $545 | | Flow-through share premium liability | $3,439 | $4,557 | | Current portion of other liabilities | $427 | $1,806 | | Long-term lease liabilities | $2,730 | $3,017 | | Provision for closure and reclamation | $5,686 | $6,160 | | Other liabilities | $472 | $691 | | **Total liabilities** | **$25,814** | **$30,753** | | **SHAREHOLDERS' EQUITY** | | | | Capital stock | $537,949 | $464,029 | | Commitment to issue shares | $1,000 | $1,250 | | Reserves | $42,547 | $39,879 | | Deficit | $(404,160) | $(367,931) | | **Total shareholders' equity** | **$177,336** | **$137,227** | | **Total liabilities and shareholders' equity** | **$203,150** | **$167,980** | [Condensed Interim Consolidated Statements of Loss and Comprehensive Loss](index=3&type=section&id=CONDENSED%20INTERIM%20CONSOLIDATED%20STATEMENTS%20OF%20LOSS%20AND%20COMPREHENSIVE%20LOSS) Skeena Resources reported a net loss of **$19,486 thousand** for Q2 2023 and **$36,229 thousand** for H1 2023, representing an improvement from prior year periods primarily due to reduced exploration and evaluation expenses and a lower flow-through share premium recovery Condensed Interim Consolidated Statements of Loss and Comprehensive Loss (in thousands of Canadian dollars, except per share amounts) | Item | For the three months ended June 30, 2023 | For the three months ended June 30, 2022 | For the six months ended June 30, 2023 | For the six months ended June 30, 2022 | | :------------------------------------------------ | :--------------------------------------- | :--------------------------------------- | :------------------------------------- | :------------------------------------- | | Accretion | $58 | $16 | $121 | $34 | | Administrative compensation | $1,427 | $1,209 | $2,811 | $1,772 | | Communications | $337 | $649 | $624 | $1,202 | | Consulting | $376 | $128 | $514 | $254 | | Depreciation | $71 | $67 | $142 | $144 | | Exploration and evaluation | $14,677 | $22,955 | $25,729 | $42,959 | | Flow-through share premium recovery | $(921) | $(4,246) | $(1,118) | $(7,114) | | Insurance | $585 | $469 | $1,117 | $1,011 | | Interest income | $(438) | $(90) | $(680) | $(146) | | Loss (gain) on marketable securities | $188 | $1,023 | $553 | $(771) | | Office and administration | $316 | $251 | $701 | $446 | | Professional fees | $376 | $200 | $871 | $638 | | Share-based payments | $2,352 | $1,903 | $4,512 | $3,072 | | Transfer agent and listing fees | $82 | $153 | $332 | $202 | | **Loss and comprehensive loss for the period** | **$(19,486)** | **$(24,687)** | **$(36,229)** | **$(43,703)** | | **Loss per share – basic and diluted** | **$(0.24)** | **$(0.36)** | **$(0.45)** | **$(0.65)** | | Weighted average number of common shares outstanding – basic and diluted | 82,197,543 | 69,059,604 | 80,045,553 | 67,447,971 | [Condensed Interim Consolidated Statements of Changes in Shareholders' Equity](index=4&type=section&id=CONDENSED%20INTERIM%20CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20SHAREHOLDERS%27%20EQUITY) Shareholders' equity significantly increased to **$177,336 thousand** by June 30, 2023, primarily driven by a **$73,537 thousand** capital increase from a bought deal offering and **$5,778 thousand** in share-based payments, partially offset by the period's loss Condensed Interim Consolidated Statements of Changes in Shareholders' Equity (in thousands of Canadian dollars, except shares) | Item | Balance December 31, 2022 | Bought deal offering | Acquisition of exploration and evaluation interests | Exercise of options | Vesting of Restricted Share Units | Tahltan Investment Rights | Exercise of warrants | Share issue costs | Share-based payments | Loss for the period | Balance June 30, 2023 | | :--------------------------------- | :------------------------ | :------------------- | :---------------------------------------- | :------------------ | :-------------------------------- | :------------------------ | :------------------ | :---------------- | :------------------- | :------------------ | :-------------------- | | Capital Stock (Amount) | $464,029 | $73,537 | $250 | $1,617 | $1,000 | $1,500 | $90 | $(4,074) | $— | $— | $537,949 | | Commitment to Issue Shares | $1,250 | $— | $(250) | $— | $— | $— | $— | $— | $— | $— | $1,000 | | Reserves (Options) | $29,640 | $— | $— | $(585) | $— | $— | $— | $— | $1,728 | $— | $30,783 | | Reserves (Restricted Share Units) | $4,804 | $— | $— | $— | $(1,000) | $— | $— | $— | $3,975 | $— | $7,779 | | Reserves (Share Units) | $— | $— | $— | $— | $— | $— | $— | $— | $75 | $— | $75 | | Reserves (Investment Rights) | $2,500 | $— | $— | $— | $— | $(1,500) | $— | $— | $— | $— | $1,000 | | Reserves (Warrants) | $2,935 | $— | $— | $— | $— | $— | $(25) | $— | $— | $— | $2,910 | | Deficit | $(367,931) | $— | $— | $— | $— | $— | $— | $— | $— | $(36,229) | $(404,160) | | **Total Shareholders' Equity** | **$137,227** | **$73,537** | **$—** | **$1,032** | **$—** | **$—** | **$65** | **$(4,074)** | **$5,778** | **$(36,229)** | **$177,336** | [Condensed Interim Consolidated Statements of Cash Flows](index=5&type=section&id=CONDENSED%20INTERIM%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Cash and cash equivalents substantially increased to **$73,446 thousand** by June 30, 2023, primarily due to **$70,292 thousand** from financing activities, largely a bought deal offering, offsetting cash used in operating and investing activities Condensed Interim Consolidated Statements of Cash Flows (in thousands of Canadian dollars) | Activity | For the three months ended June 30, 2023 | For the three months ended June 30, 2022 | For the six months ended June 30, 2023 | For the six months ended June 30, 2022 | | :---------------------------------------------------- | :--------------------------------------- | :--------------------------------------- | :------------------------------------- | :------------------------------------- | | Net cash used in operating activities | $(14,571) | $(25,652) | $(32,380) | $(41,231) | | Net cash provided by (used in) investing activities | $(3,095) | $5,329 | $(5,068) | $4,836 | | Net cash provided by (used in) financing activities | $69,410 | $(30) | $70,292 | $32,568 | | Change in cash and cash equivalents during the period | $51,744 | $(20,353) | $32,844 | $(3,827) | | Cash and cash equivalents, beginning of the period | $21,702 | $56,839 | $40,602 | $40,313 | | **Cash and cash equivalents, end of the period** | **$73,446** | **$36,486** | **$73,446** | **$36,486** | | Cash | | $23,129 | | $26,829 | | Cash equivalents | | $50,317 | | $9,657 | | **Cash and cash equivalents** | | **$73,446** | | **$36,486** | [Notes to the Condensed Interim Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20Financial%20Statements) This section provides detailed explanatory notes to the condensed interim consolidated financial statements, covering accounting policies, financial instruments, and specific operational details [1. Nature of Operations](index=6&type=section&id=1.%20NATURE%20OF%20OPERATIONS) Skeena Resources Limited, an exploration-stage mineral property company in British Columbia, relies on share issuances to fund operations, with current cash and cash equivalents of **$73,446 thousand** expected to fund committed expenditures for at least the next twelve months, and long-term viability dependent on successful project execution and additional capital raising - Skeena Resources Limited is an exploration-stage mineral property company primarily operating in British Columbia, Canada, listed on TSX, NYSE (SKE), and Frankfurt Stock Exchange (RXF)[12](index=12&type=chunk) - As of June 30, 2023, the Company had **$73,446 thousand** in cash and cash equivalents, sufficient to fund committed exploration and general administrative costs for at least the next twelve months, but not current levels of exploration activities for the full twelve months[13](index=13&type=chunk) - The Company's long-term going concern is dependent on successfully executing its business plan, including bringing the Eskay Creek project to profitable operation, and raising additional capital, primarily through share issuances, with construction financing anticipated via debt, equity, and other instruments[13](index=13&type=chunk) - On June 1, 2022, Skeena acquired QuestEx Gold & Copper Ltd. for **$41,250 thousand** in cash and share consideration, and concurrently sold certain mineral properties to an affiliate of Newmont Corporation for **$25,598 thousand**[14](index=14&type=chunk) [2. Basis of Presentation](index=6&type=section&id=2.%20BASIS%20OF%20PRESENTATION) These unaudited condensed interim consolidated financial statements are prepared under IAS 34, consistent with prior annual statements, and should be read in conjunction with the audited annual financial statements for December 31, 2022 - The unaudited condensed interim consolidated financial statements are prepared in accordance with International Accounting Standard 34 (IAS 34) and should be read in conjunction with the Company's audited consolidated financial statements for the year ended December 31, 2022[15](index=15&type=chunk) - The accounting policies applied and significant accounting estimates and judgments made by management are consistent with those disclosed in the Company's audited annual consolidated financial statements as of and for the year ended December 31, 2022[16](index=16&type=chunk)[18](index=18&type=chunk) [Significant Accounting Estimates and Judgments](index=7&type=section&id=Significant%20accounting%20estimates%20and%20judgments) Significant accounting estimates and judgments remain consistent with those applied in the Company's audited annual consolidated financial statements for the year ended December 31, 2022 - Significant judgments and key sources of estimation uncertainty are consistent with those applied to the annual consolidated financial statements as at and for the year ended December 31, 2022[18](index=18&type=chunk) [3. New Standards, Amendments and Interpretations Adopted](index=7&type=section&id=3.%20NEW%20STANDARDS%2C%20AMENDMENTS%20AND%20INTERPRETATIONS%20ADOPTED) Effective January 1, 2023, the Company adopted amendments to IAS 1 and IFRS Practice Statement 2 concerning material accounting policies, which had no material impact on its consolidated financial statements - Effective January 1, 2023, the Company adopted amendments to IAS 1 and IFRS Practice Statement 2, which replace the requirement to disclose 'significant' accounting policies with 'material' accounting policies[19](index=19&type=chunk) - The adoption of these amendments had no material impact on the Company's consolidated financial statements[20](index=20&type=chunk) [4. Financial Instruments and Risk Management](index=7&type=section&id=4.%20FINANCIAL%20INSTRUMENTS%20AND%20RISK%20MANAGEMENT) The Company manages credit, market, and liquidity risks associated with its financial instruments, including cash, marketable securities, and various payables, with marketable securities measured at FVTPL and others at amortized cost, noting increased costs from geopolitical events and inflation without material operational impact to date Financial Instrument Carrying Values (in thousands of Canadian dollars) | Financial Instrument | June 30, 2023 | December 31, 2022 | | :------------------- | :------------ | :---------------- | | Cash and cash equivalents | $73,446 | $40,602 | | Marketable securities | $1,793 | $2,494 | | Receivables | $644 | $35 | | Deposits | $2,405 | $2,128 | | Accounts payable | $4,006 | $10,209 | | Other liabilities | $899 | $2,497 | - Financial instruments measured at fair value (marketable securities and contingent consideration receivable) are classified into Level 1 (quoted prices in active markets) or Level 3 (unobservable market data) of the fair value hierarchy[21](index=21&type=chunk)[23](index=23&type=chunk) [Credit Risk](index=8&type=section&id=Credit%20risk) The Company measures expected credit losses using a probability-weighted model, with no material expected credit losses identified for its financial instruments held at amortized cost - Expected credit losses are measured using a present value and probability-weighted model, considering past defaults, current conditions, and forecasts[24](index=24&type=chunk) - There are no material expected credit losses with respect to the Company's financial instruments held at amortized cost[25](index=25&type=chunk) [Market Risk](index=8&type=section&id=Market%20risk) The Company is exposed to market risk on its marketable securities, where a **10%** decrease in share price at June 30, 2023, would result in a **$181 thousand** decrease in carrying value and an increase in unrealized loss - The Company is exposed to market risk on its marketable securities; a **10%** decrease in share price at June 30, 2023, would result in a **$181 thousand** decrease in carrying value and an increase in unrealized loss[26](index=26&type=chunk) [Liquidity Risk](index=8&type=section&id=Liquidity%20risk) Liquidity risk is managed through cash flow forecasting and anticipating financing activities to ensure sufficient funds to meet liabilities when due - Liquidity risk is managed by forecasting cash flows and anticipating investing and financing activities to ensure sufficient cash to meet liabilities when due[27](index=27&type=chunk) Undiscounted Financial Liabilities Maturity as of June 30, 2023 (in thousands of Canadian dollars) | | Less than 1 year | 1-5 years | Greater than 5 years | Total | | :----------------- | :--------------- | :-------- | :------------------- | :---- | | Accounts payable | $4,006 | $— | $— | $4,006 | | Other liabilities | $500 | $500 | $— | $1,000 | | **Total** | **$4,506** | **$500** | **$—** | **$5,006** | [Other Risks](index=9&type=section&id=Other%20risks) Geopolitical tensions and global inflation have led to increasing costs for material inputs in 2022 and 2023, though without material negative impact on the Company's operations to date - Geopolitical tensions, such as the Russia-Ukraine conflict, and global inflation have led to increasing costs for material inputs in 2022 and 2023[29](index=29&type=chunk)[31](index=31&type=chunk) - To date, the Company's operations have not been materially negatively affected by these events, but the future impact, severity, and duration remain unclear and cannot be reliably estimated[31](index=31&type=chunk) [5. Exploration and Evaluation Interests](index=9&type=section&id=5.%20EXPLORATION%20AND%20EVALUATION%20INTERESTS) Exploration and evaluation assets slightly increased to **$95,938 thousand** by June 30, 2023, primarily from Eskay Creek additions, while total expenses for H1 2023 decreased to **$25,729 thousand** due to reduced Eskay Creek spending Exploration and Evaluation Assets (in thousands of Canadian dollars) | Property | December 31, 2021 | December 31, 2022 | June 30, 2023 | | :--------- | :---------------- | :---------------- | :------------ | | Eskay | $74,444 | $78,488 | $79,107 | | KSP | $— | $7,872 | $7,872 | | Kingpin | $— | $3,936 | $3,936 | | Red Chris | $— | $2,871 | $2,871 | | Snip | $1,087 | $959 | $840 | | Sofia | $— | $1,312 | $1,312 | | **Total** | **$75,531** | **$95,438** | **$95,938** | Total Exploration and Evaluation Expenses (in thousands of Canadian dollars) | Period | 2023 | 2022 | | :-------------------------- | :----- | :----- | | Three months ended June 30 | $14,677 | $22,955 | | Six months ended June 30 | $25,729 | $42,959 | [Exploration and Evaluation Assets](index=9&type=section&id=Exploration%20and%20evaluation%20assets) Total exploration and evaluation assets increased from **$95,438 thousand** at December 31, 2022, to **$95,938 thousand** at June 30, 2023, with **$1,011 thousand** in additions primarily at Eskay Creek - Total exploration and evaluation assets increased from **$95,438 thousand** at December 31, 2022, to **$95,938 thousand** at June 30, 2023[32](index=32&type=chunk) - Additions to exploration and evaluation assets for the six months ended June 30, 2023, totaled **$1,011 thousand**, primarily at Eskay Creek[32](index=32&type=chunk)[33](index=33&type=chunk) [Eskay Creek Property](index=9&type=section&id=Eskay%20Creek%20Property%2C%20British%20Columbia%2C%20Canada) The Company acquired the Eskay North mineral property in October 2022 and incurred **$1,011 thousand** for earthworks related to infrastructure at Eskay Creek during H1 2023 - In October 2022, the Company acquired the Eskay North mineral property from Tudor Gold Corp. for common shares and **$1,400 thousand** cash paid during the six months ended June 30, 2023[33](index=33&type=chunk) - During the six months ended June 30, 2023, **$1,011 thousand** was incurred for earthworks related to infrastructure at Eskay Creek[33](index=33&type=chunk) [Red Chris Properties](index=10&type=section&id=Red%20Chris%20Properties%2C%20British%20Columbia%2C%20Canada) Skeena acquired the Red Chris Properties in October 2022 for **$3,000 thousand**, making a **$250 thousand** cash payment and issuing 30,413 common shares in April 2023 - In October 2022, Skeena acquired the Red Chris Properties for **$3,000 thousand**, payable in six equal payments of **$250 thousand** cash and **$250 thousand** in common shares[35](index=35&type=chunk) - In April 2023, the Company paid **$250 thousand** in cash and issued **30,413** common shares to Coast Copper Corp. for the Red Chris Properties[35](index=35&type=chunk) [Snip Property](index=10&type=section&id=Snip%20Property%2C%20British%20Columbia%2C%20Canada) Hochschild Mining Holdings Limited terminated its right to earn **60%** of the Snip property in April 2023, after initiating the option in October 2021 - Hochschild Mining Holdings Limited terminated its right to earn **60%** of the Snip property in April 2023, having initiated the option in October 2021[36](index=36&type=chunk) [Exploration and Evaluation Expenses](index=10&type=section&id=Exploration%20and%20evaluation%20expenses) Exploration and evaluation expenses for Q2 and H1 2023 were primarily concentrated at the Eskay property, with no expenses incurred on KSP and Kingpin properties in the prior year Exploration and Evaluation Expenses by Property (Three Months Ended June 30, 2023, in thousands of Canadian dollars) | Category | Eskay | KSP | Kingpin | Red Chris | Snip | Sofia | Total | | :------------------------------ | :---- | :-- | :------ | :-------- | :--- | :---- | :---- | | Geology, geophysics, geochemical | $4,182 | $52 | $— | $— | $— | $1 | $4,235 | | Environmental studies | $3,924 | $— | $— | $— | $36 | $— | $3,960 | | Fieldwork, camp support | $1,803 | $7 | $8 | $2 | $(8) | $21 | $1,833 | | Drilling | $616 | $— | $— | $— | $— | $— | $616 | | **Total for the period** | **$14,400** | **$125** | **$27** | **$54** | **$56** | **$15** | **$14,677** | Exploration and Evaluation Expenses by Property (Six Months Ended June 30, 2023, in thousands of Canadian dollars) | Category | Eskay | KSP | Kingpin | Red Chris | Snip | Sofia | Total | | :------------------------------ | :---- | :-- | :------ | :-------- | :--- | :---- | :---- | | Geology, geophysics, geochemical | $7,915 | $52 | $— | $— | $— | $3 | $7,970 | | Environmental studies | $7,178 | $— | $— | $— | $111 | $— | $7,289 | | Fieldwork, camp support | $2,444 | $7 | $8 | $2 | $— | $64 | $2,525 | | Drilling | $616 | $— | $— | $— | $— | $2 | $618 | | **Total for the period** | **$25,223** | **$125** | **$27** | **$54** | **$156** | **$144** | **$25,729** | - No exploration and evaluation expenses were incurred on KSP and Kingpin properties during the three and six months ended June 30, 2022[41](index=41&type=chunk) [6. Related Party Transactions](index=12&type=section&id=6.%20RELATED%20PARTY%20TRANSACTIONS) Related party transactions primarily encompass key management compensation, including remuneration, termination benefits, and share-based payments, alongside minor receivables and payables with entities sharing common directors or officers Key Management Compensation (in thousands of Canadian dollars) | Compensation Type | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Director remuneration | $82 | $2 | $163 | $88 | | Officer & key management remuneration | $843 | $894 | $1,697 | $1,712 | | Termination benefits | $— | $— | $675 | $— | | Share-based payments | $2,424 | $1,851 | $4,054 | $2,943 | - Share-based payment expenses for related parties are allocated between exploration and evaluation expenses and general and administrative expenses[43](index=43&type=chunk) [Key Management Compensation](index=12&type=section&id=Key%20management%20compensation) Share-based payment expenses for related parties increased for Q2 2023 to **$2,424 thousand** (from **$1,851 thousand** in 2022) and for H1 2023 to **$4,054 thousand** (from **$2,943 thousand** in 2022), with **$675 thousand** in termination benefits recorded for H1 2023 - Share-based payment expenses for related parties increased for the three months ended June 30, 2023, to **$2,424 thousand** (from **$1,851 thousand** in 2022) and for the six months ended June 30, 2023, to **$4,054 thousand** (from **$2,943 thousand** in 2022)[42](index=42&type=chunk) - Termination benefits of **$675 thousand** were recorded for the six months ended June 30, 2023[42](index=42&type=chunk) [Recoveries](index=13&type=section&id=Recoveries) The Company recovered **$2 thousand** (Q2 2023) and **$6 thousand** (H1 2023) from a company with a common officer for employee services, recorded in administrative compensation expense - The Company recovered **$2 thousand** (Q2 2023) and **$6 thousand** (H1 2023) from a company with a common officer for employee time used to provide services, recorded in administrative compensation expense[44](index=44&type=chunk) [Receivables](index=13&type=section&id=Receivables) Receivables at June 30, 2023, included **$5 thousand** (December 31, 2022 – **$6 thousand**) due from companies with common directors or officers - Included in receivables at June 30, 2023, is **$5 thousand** (December 31, 2022 – **$6 thousand**) due from companies with common directors or officers[45](index=45&type=chunk) [Accounts payable and accrued liabilities](index=13&type=section&id=Accounts%20payable%20and%20accrued%20liabilities) Accounts payable and accrued liabilities at June 30, 2023, included **$798 thousand** (December 31, 2022 – **$708 thousand**) due to key management personnel for compensation - Included in accounts payable and accrued liabilities at June 30, 2023, is **$798 thousand** (December 31, 2022 – **$708 thousand**) due to key management personnel for compensation[46](index=46&type=chunk) [7. Capital Stock and Reserves](index=13&type=section&id=7.%20CAPITAL%20STOCK%20AND%20RESERVES) Capital stock significantly increased due to a **$73,537 thousand** bought deal public offering in May 2023, alongside share-based payment activities under the 2023 Omnibus Equity Incentive Plan, involving grants of stock options, RSUs, and DSUs - The Company has an unlimited number of authorized voting common shares without par value[48](index=48&type=chunk) - The 2023 Omnibus Equity Incentive Plan was adopted, governing stock options, RSUs, PSUs, and DSUs[53](index=53&type=chunk) [Private placements and bought deal offerings](index=13&type=section&id=Private%20placements%20and%20bought%20deal%20offerings) The Company closed a bought deal public offering on May 24, 2023, issuing **10,005,000** common shares for **$73,537 thousand** gross proceeds, with **$4,074 thousand** in issuance costs - On May 24, 2023, the Company closed a bought deal public offering, issuing **10,005,000** common shares at **$7.35** per share, raising gross proceeds of **$73,537 thousand**[49](index=49&type=chunk) - Share issuance costs related to the bought deal offering totaled **$4,074 thousand**[49](index=49&type=chunk) [Tahltan Investment Rights](index=13&type=section&id=Tahltan%20Investment%20Rights) Milestone 1 for Tahltan Investment Rights was met during H1 2023, converting **119,785** Rights into common shares valued at **$1,500 thousand**, with only Milestone 4 remaining by June 30, 2023 - During the six months ended June 30, 2023, Milestone 1 for the Tahltan Investment Rights was met, converting **119,785** Rights into common shares valued at **$1,500 thousand**[52](index=52&type=chunk) - As of June 30, 2023, only Milestone 4 of the Tahltan Investment Rights remains to be achieved, with a vesting date of April 16, 2024[52](index=52&type=chunk)[57](index=57&type=chunk) [Share-Based Payments](index=14&type=section&id=Share-based%20payments) Share-based payment activities include grants of stock options, RSUs, and DSUs with varying vesting schedules, and a summary of transactions for warrants, RSUs, DSUs, and stock options is provided - Stock options have a maximum expiry period of **5** years from the grant date[54](index=54&type=chunk) - RSUs and DSUs can vest into common shares, cash payment, or a combination, at the Board's discretion[55](index=55&type=chunk) - DSUs are granted to independent directors, vest immediately, but are redeemable only after the participant ceases all offices/employment with the Company[56](index=56&type=chunk) Share Purchase Warrant, RSU, DSU, and Stock Option Transactions Summary | | Warrants (Number) | RSUs (Number) | DSUs (Number) | Stock Options (Number) | | :-------------------------- | :---------------- | :------------ | :------------ | :--------------------- | | Outstanding, Dec 31, 2022 | 12,823 | 1,835,821 | — | 5,033,425 | | Granted (H1 2023) | — | 607,750 | 11,755 | 155,151 | | Exercised (H1 2023) | (9,657) | (76,923) | — | (267,108) | | Cancelled (H1 2023) | (3,166) | (187,960) | — | (287,137) | | Outstanding, June 30, 2023 | — | 2,178,688 | 11,755 | 4,634,331 | | Exercisable, June 30, 2023 | — | — | — | 3,961,941 | - Weighted average share price at exercise for stock options was **$7.46** (H1 2023) vs. **$15.51** (H1 2022), and for warrants was **$7.69** (H1 2023) vs. **$15.78** (H1 2022)[58](index=58&type=chunk) Share-Based Payment Grants (Six Months Ended June 30, 2023) | Grant Date | Type | Number Granted | Fair Value (CAD thousands) | Vesting | | :--------- | :--- | :------------- | :------------------------- | :------ | | Feb 14, 2023 | RSUs | 145,000 | **$1,056** | 1/3 after 12, 24, 36 months | | May 15, 2023 | Stock Options | 155,151 | **$631** | 1/3 after 12, 24, 36 months | | May 15, 2023 | RSUs | 462,750 | **$3,896** | 1/3 after 12, 24, 36 months | | June 22, 2023 | DSUs | 11,755 | **$75** | Immediately | Share-Based Payment Grants (Six Months Ended June 30, 2022) | Grant Date | Type | Number Granted | Fair Value (CAD thousands) | Vesting | | :--------- | :--- | :------------- | :------------------------- | :------ | | April 21, 2022 | Stock Options | 103,264 | **$675** | 34% after 12, 33% after 24, 33% after 36 months | | April 21, 2022 | RSUs | 291,285 | **$3,787** | April 21, 2024 | | April 21, 2022 | RSUs | 230,769 | **$3,000** | 1/3 on April 21, 2023, Oct 21, 2023, April 21, 2024 | | June 1, 2022 | Replacement Options | 77,158 | **$267** | Immediately | | June 1, 2022 | Replacement Warrants | 150,691 | **$61** | Immediately | Weighted Average Inputs for Option Pricing Models | Input | Warrants (2023) | Warrants (2022) | Stock Options (2023) | Stock Options (2022) | | :------------------ | :-------------- | :-------------- | :------------------- | :------------------- | | Expected life (years) | — | 0.3 | 3.5 | 3.2 | | Annualized volatility | — | **35.00%** | **65.00%** | **65.00%** | | Dividend rate | — | **0.00%** | **0.00%** | **0.00%** | | Risk-free interest rate | — | **2.74%** | **3.86%** | **2.65%** | [8. Supplemental Disclosure with Respect to Cash Flows](index=17&type=section&id=8.%20SUPPLEMENTAL%20DISCLOSURE%20WITH%20RESPECT%20TO%20CASH%20FLOWS) Non-cash transactions for H1 2023 included **$1,138 thousand** in capital asset additions and **$1,686 thousand** in reclassified deposits, with no interest or income tax payments made during the period Non-Cash Transactions (in thousands of Canadian dollars) | Transaction | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :---------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Capital asset additions in accounts payable | $1,138 | $208 | $1,138 | $208 | | Deposits reclassified to capital assets | $1,686 | $— | $1,686 | $— | | Proceeds from sale of equipment in receivables | $— | $16 | $— | $16 | | Share issue costs in accounts payable | $138 | $— | $138 | $— | - The Company did not make any payments towards interest or income taxes during the three and six months ended June 30, 2023, and 2022[72](index=72&type=chunk) [9. Contingencies](index=18&type=section&id=9.%20CONTINGENCIES) The Company accrues liabilities for legal and tax matters when the amount can be reasonably estimated and settlement is probable to require an outflow of future economic benefits - The Company accrues liabilities for legal and tax matters when the amount can be reasonably estimated and settlement is probable to require an outflow of future economic benefits[74](index=74&type=chunk) [10. Subsequent Event](index=18&type=section&id=10.%20SUBSEQUENT%20EVENT) On July 7, 2023, the Company acquired five mineral claims near Eskay Creek for **$4,000 thousand** cash, subject to a **2%** net smelter return royalty with an option to purchase **1%** for **$2,000 thousand** - On July 7, 2023, the Company acquired five mineral claims surrounding Eskay Creek for **$4,000 thousand** cash, with **$2,000 thousand** paid on closing and the remainder due by December 31, 2023[75](index=75&type=chunk) - The acquired mineral claims are subject to a **2%** net smelter return (NSR) royalty, with an option to purchase **1%** of the NSR for **$2,000 thousand**[75](index=75&type=chunk) ```

[Condensed Interim Consolidated Financial Statements](index=1&type=section&id=Condensed%20Interim%20Consolidated%20Financial%20Statements) This section presents Skeena Resources Limited's unaudited interim financial statements, including statements of financial position, loss, changes in equity, and cash flows, for the period ended March 31, 2023 [Condensed Interim Consolidated Statements of Financial Position](index=2&type=section&id=CONDENSED%20INTERIM%20CONSOLIDATED%20STATEMENTS%20OF%20FINANCIAL%20POSITION) Skeena's financial position as of March 31, 2023, shows decreased total assets and equity, mainly from reduced cash and cash equivalents Key Financial Position Metrics (CAD thousands) | Metric | March 31, 2023 (CAD thousands) | December 31, 2022 (CAD thousands) | | :-------------------------------- | :------------------------------- | :-------------------------------- | | Cash and cash equivalents | 21,702 | 40,602 | | Total current assets | 32,235 | 50,124 | | Exploration and evaluation interests | 95,174 | 95,438 | | Total assets | 151,235 | 167,980 | | Total current liabilities | 17,729 | 20,885 | | Total liabilities | 27,228 | 30,753 | | Total shareholders' equity | 124,007 | 137,227 | [Condensed Interim Consolidated Statements of Loss and Comprehensive Loss](index=3&type=section&id=CONDENSED%20INTERIM%20CONSOLIDATED%20STATEMENTS%20OF%20LOSS%20AND%20COMPREHENSIVE%20LOSS) Q1 2023 net loss decreased year-over-year, primarily due to significantly lower exploration and evaluation expenses and a smaller loss on marketable securities Key Loss and Comprehensive Loss Metrics (CAD thousands) | Metric | Three months ended March 31, 2023 (CAD thousands) | Three months ended March 31, 2022 (CAD thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | Exploration and evaluation | 11,052 | 20,004 | | Administrative compensation | 1,384 | 563 | | Share-based payments | 2,160 | 1,169 | | Loss (gain) on marketable securities | 365 | (1,794) | | Loss and comprehensive loss for the period | (16,743) | (19,016) | | Loss per share – basic and diluted | (0.22) | (0.29) | [Condensed Interim Consolidated Statements of Changes in Shareholders' Equity](index=4&type=section&id=CONDENSED%20INTERIM%20CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20SHAREHOLDERS'%20EQUITY) Shareholders' equity decreased from $137,227 thousand to $124,007 thousand in Q1 2023, mainly due to the period's loss, partially offset by share-based payments Changes in Shareholders' Equity Components (CAD thousands) | Metric | Balance Dec 31, 2022 (CAD thousands) | Balance March 31, 2023 (CAD thousands) | | :-------------------------------- | :----------------------------------- | :----------------------------------- | | Capital Stock | 464,029 | 467,216 | | Reserves | 39,879 | 40,215 | | Deficit | (367,931) | (384,674) | | Total Shareholders' Equity | 137,227 | 124,007 | - The company issued **119,785 common shares** valued at **$1,500,000** upon the achievement of Milestone 1 for Tahltan Investment Rights during Q1 2023[7](index=7&type=chunk)[41](index=41&type=chunk) - Share-based payments contributed **$2,438,000** to equity in Q1 2023, compared to **$1,912,000** in Q1 2022[7](index=7&type=chunk) [Condensed Interim Consolidated Statements of Cash Flows](index=5&type=section&id=CONDENSED%20INTERIM%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Cash and cash equivalents significantly decreased from $40,602 thousand to $21,702 thousand in Q1 2023, driven by cash used in operating and investing activities Cash Flow Activities (CAD thousands) | Cash Flow Activity | Three months ended March 31, 2023 (CAD thousands) | Three months ended March 31, 2022 (CAD thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | Net cash used in operating activities | (17,809) | (15,579) | | Net cash used in investing activities | (1,973) | (493) | | Net cash provided by financing activities | 882 | 32,598 | | Change in cash and cash equivalents | (18,900) | 16,526 | | Cash and cash equivalents, end of period | 21,702 | 56,839 | - Proceeds from warrant exercises significantly decreased from **$30,375,000** in Q1 2022 to **$65,000** in Q1 2023[9](index=9&type=chunk) [Notes to the Condensed Interim Consolidated Financial Statements](index=6&type=section&id=NOTES%20TO%20THE%20CONDENSED%20INTERIM%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed notes to the condensed interim consolidated financial statements, covering accounting policies, financial instruments, exploration activities, and related party transactions [1. Nature of Operations](index=6&type=section&id=1.%20NATURE%20OF%20OPERATIONS) Skeena Resources Limited is an exploration-stage mineral property company in British Columbia, requiring additional capital for long-term exploration and the Eskay Creek project - Skeena Resources Limited is primarily engaged in the exploration of mineral properties in British Columbia, Canada, and is currently in the exploration stage[12](index=12&type=chunk) - As of March 31, 2023, the Company had **$21,702,000** in cash and cash equivalents, sufficient to fund committed exploration and general administrative costs for at least the next twelve months, but not for current levels of exploration activities beyond that[13](index=13&type=chunk) - Long-term viability depends on successful execution of its business plan, including bringing the Eskay Creek project to profitable operation, and raising additional capital primarily through share issuances, with future construction financing anticipated through a combination of debt, equity, and other instruments[13](index=13&type=chunk) [2. Basis of Presentation](index=6&type=section&id=2.%20BASIS%20OF%20PRESENTATION) These unaudited interim financial statements, prepared under IAS 34, should be read with the 2022 annual statements, maintaining consistent accounting policies and estimates - The financial statements are prepared in accordance with International Accounting Standard 34 (IAS 34), Interim Financial Reporting[14](index=14&type=chunk) - Accounting policies and significant accounting estimates and judgments are consistent with those applied in the audited annual consolidated financial statements for the year ended December 31, 2022[15](index=15&type=chunk)[16](index=16&type=chunk) [3. New Standards, Amendments and Interpretations Adopted](index=7&type=section&id=3.%20NEW%20STANDARDS,%20AMENDMENTS%20AND%20INTERPRETATIONS%20ADOPTED) Effective January 1, 2023, the Company adopted IAS 1 and IFRS Practice Statement 2 amendments, changing disclosure from 'significant' to 'material' accounting policies - The Company adopted amendments to IAS 1 and IFRS Practice Statement 2, effective January 1, 2023, which change the requirement from disclosing 'significant' to 'material' accounting policies[18](index=18&type=chunk)[19](index=19&type=chunk) [4. Financial Instruments and Risk Management](index=7&type=section&id=4.%20FINANCIAL%20INSTRUMENTS%20AND%20RISK%20MANAGEMENT) The Company's financial instruments include cash, marketable securities, receivables, and payables, exposed to credit, market, and liquidity risks, with geopolitical and inflation factors increasing operational costs Financial Instrument Carrying Values (CAD thousands) | Financial Instrument | Category | March 31, 2023 (CAD thousands) | December 31, 2022 (CAD thousands) | | :-------------------------------- | :------------------------------- | :------------------------------- | :-------------------------------- | | Cash and cash equivalents | Amortized cost | 21,702 | 40,602 | | Marketable securities | FVTPL | 2,128 | 2,494 | | Receivables | Amortized cost | 164 | 35 | | Deposits | Amortized cost | 3,942 | 2,128 | | Accounts payable | Amortized cost | 3,551 | 10,209 | | Other liabilities | Amortized cost | 2,525 | 2,497 | - Marketable securities (excluding warrants) are measured using Level 1 inputs, while warrants within marketable securities and contingent consideration receivable use Level 3 inputs in the fair value hierarchy[21](index=21&type=chunk) - The Company's operations have not been materially negatively affected by global events like the Russia-Ukraine conflict, apart from increasing costs due to higher inflation on material inputs in 2022 and 2023[27](index=27&type=chunk) [Credit Risk](index=7&type=section&id=Credit%20risk) The Company assesses expected credit losses using a probability-weighted model, identifying no material expected credit losses for amortized cost financial instruments - The Company applies IFRS 9 for recognizing expected credit losses, but no material expected credit losses were identified for financial instruments held at amortized cost as of March 31, 2023[21](index=21&type=chunk)[22](index=22&type=chunk) [Market Risk](index=9&type=section&id=Market%20risk) Market risk, including interest rate, foreign currency, and other price risk, primarily impacts marketable securities; a 10% decrease would reduce carrying value by $213,000 - A **10% decrease** in the share price of marketable securities at March 31, 2023, would lead to a **$213,000 decrease** in carrying value and an increase in unrealized loss[23](index=23&type=chunk) [Liquidity Risk](index=9&type=section&id=Liquidity%20risk) Liquidity risk is managed by cash flow forecasting; total undiscounted financial liabilities are $6,201,000, with most ($5,451,000) maturing within one year Undiscounted Financial Liabilities Maturity (CAD thousands) | Maturity Period | Accounts payable (CAD thousands) | Other liabilities (CAD thousands) | Total (CAD thousands) | | :---------------- | :------------------------------- | :-------------------------------- | :-------------------- | | Less than 1 year | 3,551 | 1,900 | 5,451 | | 1-3 years | — | 750 | 750 | | 3-5 years | — | — | — | | > 5 years | — | — | — | | Total | 3,551 | 2,650 | 6,201 | [Other Risks](index=9&type=section&id=Other%20risks) Geopolitical conflicts and global economic volatility, including inflation, have increased operational costs, with future impacts remaining uncertain - The Russia-Ukraine conflict and global economic volatility (inflation, supply chain challenges) have increased operational costs for the Company in 2022 and 2023, though direct material negative effects on operations have not occurred to date[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) [5. Exploration and Evaluation Interests](index=11&type=section&id=5.%20EXPLORATION%20AND%20EVALUATION%20INTERESTS) Exploration and evaluation assets totaled $95,174 thousand as of March 31, 2023, with Q1 2023 expenses significantly decreasing to $11,052 thousand, mainly due to reduced Eskay spending Exploration and Evaluation Assets (CAD thousands) | Property | Balance Dec 31, 2022 (CAD thousands) | Balance March 31, 2023 (CAD thousands) | | :---------------- | :----------------------------------- | :----------------------------------- | | Eskay | 78,488 | 78,347 | | KSP | 7,872 | 7,872 | | Kingpin | 3,936 | 3,936 | | Red Chris | 2,871 | 2,871 | | Snip | 959 | 836 | | Sofia | 1,312 | 1,312 | | Total | 95,438 | 95,174 | - In April 2023, Hochschild Mining Holdings Limited terminated its right to earn **60% of the Snip property**[31](index=31&type=chunk) - Total exploration and evaluation expenses for Q1 2023 were **$11,052,000**, a significant decrease from **$20,004,000** in Q1 2022, with Eskay Creek accounting for the majority of expenses in both periods[33](index=33&type=chunk)[34](index=34&type=chunk) [Exploration and Evaluation Assets](index=11&type=section&id=Exploration%20and%20evaluation%20assets) Exploration and evaluation assets slightly decreased to $95,174 thousand by March 31, 2023, mainly due to closure liability adjustments for Eskay and Snip Exploration and Evaluation Assets by Property (CAD thousands) | Property | Balance Dec 31, 2022 (CAD thousands) | Balance March 31, 2023 (CAD thousands) | | :---------------- | :----------------------------------- | :----------------------------------- | | Eskay | 78,488 | 78,347 | | Snip | 959 | 836 | | Total | 95,438 | 95,174 | [Eskay Creek Property, British Columbia, Canada](index=11&type=section&id=Eskay%20Creek%20Property,%20British%20Columbia,%20Canada) In April 2023, the Company paid $1,400,000 cash to Tudor Gold Corp. for the Eskay North mineral property acquisition - In April 2023, Skeena made a **$1,400,000 cash payment** to Tudor Gold Corp. for the Eskay North mineral property acquisition[29](index=29&type=chunk) [Red Chris Properties, British Columbia, Canada](index=11&type=section&id=Red%20Chris%20Properties,%20British%20Columbia,%20Canada) In April 2023, the Company paid $250,000 cash and issued 30,413 common shares to Coast Copper Corp. for the Red Chris Properties - In April 2023, Skeena paid **$250,000 in cash** and issued **30,413 common shares** to Coast Copper Corp. for the Red Chris Properties[30](index=30&type=chunk) [Snip Property, British Columbia, Canada](index=11&type=section&id=Snip%20Property,%20British%20Columbia,%20Canada) Hochschild Mining Holdings Limited terminated its option to earn 60% of the Snip property in April 2023 - Hochschild Mining Holdings Limited terminated its right to earn **60% of the Snip property** in April 2023[31](index=31&type=chunk) [Exploration and Evaluation Expenses](index=12&type=section&id=Exploration%20and%20evaluation%20expenses) Q1 2023 exploration and evaluation expenses significantly decreased to $11,052 thousand from $20,004 thousand, primarily due to reduced Eskay spending Exploration and Evaluation Expenses by Category (CAD thousands) | Expense Category | Q1 2023 (CAD thousands) | Q1 2022 (CAD thousands) | | :-------------------------------- | :---------------------- | :---------------------- | | Environmental studies | 3,329 | 1,318 | | Geology, geophysics, and geochemical | 3,735 | 5,759 | | Fieldwork, camp support | 692 | 4,628 | | Assays and analysis/storage | 955 | 1,204 | | Total for the period | 11,052 | 20,004 | - No exploration and evaluation expenses were incurred on KSP, Kingpin, and Red Chris properties during Q1 2023[33](index=33&type=chunk) [6. Related Party Transactions](index=13&type=section&id=6.%20RELATED%20PARTY%20TRANSACTIONS) Related party transactions mainly involve increased key management compensation in Q1 2023, alongside minor salary recoveries and intercompany receivables/payables Key Management Compensation (CAD thousands) | Compensation Type | Q1 2023 (CAD thousands) | Q1 2022 (CAD thousands) | | :-------------------------------- | :---------------------- | :---------------------- | | Director remuneration | 81 | 86 | | Officer & key management remuneration | 854 | 818 | | Termination benefits | 675 | — | | Share-based payments | 1,630 | 1,092 | - Share-based payment expenses to related parties were **$1,630,000** in Q1 2023, allocated as **$126,000** to exploration and evaluation expense and **$1,504,000** to general and administrative expense[35](index=35&type=chunk) [Key Management Compensation](index=13&type=section&id=Key%20management%20compensation) Key management compensation for Q1 2023 increased to $3,240 thousand from $1,996 thousand, driven by termination benefits and higher share-based payments Key Management Compensation Details (CAD thousands) | Compensation Type | Q1 2023 (CAD thousands) | Q1 2022 (CAD thousands) | | :-------------------------------- | :---------------------- | :---------------------- | | Director remuneration | 81 | 86 | | Officer & key management remuneration | 854 | 818 | | Termination benefits | 675 | — | | Share-based payments | 1,630 | 1,092 | [Recoveries](index=13&type=section&id=Recoveries) The Company recovered $4,000 in salary from a company with a common officer in Q1 2023 - Salary recoveries from a company with a common officer amounted to **$4,000** in Q1 2023, up from **$1,000** in Q1 2022[36](index=36&type=chunk) [Receivables](index=13&type=section&id=Receivables) Receivables from companies with common directors or officers totaled $4,000 as of March 31, 2023 - Receivables from companies with common directors or officers were **$4,000** at March 31, 2023, down from **$6,000** at December 31, 2022[37](index=37&type=chunk) [Accounts Payable and Accrued Liabilities](index=13&type=section&id=Accounts%20payable%20and%20accrued%20liabilities) Accounts payable and accrued liabilities included $1,048,000 due to key management personnel as of March 31, 2023 - Accounts payable and accrued liabilities included **$1,048,000** due to key management personnel at March 31, 2023, an increase from **$708,000** at December 31, 2022[38](index=38&type=chunk) [7. Capital Stock and Reserves](index=13&type=section&id=7.%20CAPITAL%20STOCK%20AND%20RESERVES) Capital stock consists of unlimited common shares; Q1 2023 included Tahltan Investment Rights conversion, RSU grants, and option/warrant exercises - The Company has an unlimited number of authorized voting common shares without par value[39](index=39&type=chunk) - As of March 31, 2023, **4,674,257 stock options** and **110 warrants** were outstanding, with weighted average exercise prices of **$10.76** and **$2.72**, respectively[43](index=43&type=chunk) - Subsequent to March 31, 2023, all outstanding and exercisable warrants expired unexercised[43](index=43&type=chunk) [Tahltan Investment Rights](index=14&type=section&id=Tahltan%20Investment%20Rights) Milestone 1 for Tahltan Investment Rights was met in Q1 2023, converting 119,785 Rights into common shares valued at $1,500,000 - Milestone 1 for Tahltan Investment Rights was met in Q1 2023, converting **119,785 Rights** into common shares valued at **$1,500,000**[41](index=41&type=chunk) [Share-based Payments](index=14&type=section&id=Share-based%20payments) Q1 2023 share-based payments included 145,000 RSU grants valued at $1,056,000, vesting over 36 months, with weighted average exercise prices of $7.42 for options and $7.69 for warrants Share-based Payment Instruments Activity (Q1 2023) | Instrument | Outstanding Dec 31, 2022 | Granted Q1 2023 | Exercised Q1 2023 | Cancelled Q1 2023 | Outstanding March 31, 2023 | | :---------------- | :----------------------- | :-------------- | :---------------- | :---------------- | :------------------------- | | Warrants | 12,823 | — | (9,657) | (3,056) | 110 | | RSUs | 1,835,821 | 145,000 | — | (186,515) | 1,794,306 | | Stock Options | 5,033,425 | — | (260,108) | (99,060) | 4,674,257 | - **145,000 RSUs** were granted on February 14, 2023, with a fair value of **$1,056,000**, vesting over a 36-month period[44](index=44&type=chunk) - The weighted average share price at the date of exercise for stock options was **$7.42** in Q1 2023 (vs. **$15.68** in Q1 2022), and for warrants was **$7.69** in Q1 2023 (vs. **$15.78** in Q1 2022)[42](index=42&type=chunk) [8. Supplemental Disclosure with Respect to Cash Flows](index=15&type=section&id=8.%20SUPPLEMENTAL%20DISCLOSURE%20WITH%20RESPECT%20TO%20CASH%20FLOWS) Q1 2023 non-cash transactions included $142,000 in capital asset additions within accounts payable; no interest or income tax payments were made Non-Cash Transactions (CAD thousands) | Non-Cash Transaction | Q1 2023 (CAD thousands) | Q1 2022 (CAD thousands) | | :-------------------------------- | :---------------------- | :---------------------- | | Capital asset additions included in accounts payable and accrued liabilities | 142 | 587 | - The Company did not make any payments towards interest or income taxes during the three months ended March 31, 2023, or 2022[46](index=46&type=chunk) [9. Contingencies](index=16&type=section&id=9.%20CONTINGENCIES) The Company accrues legal and tax liabilities when amounts are estimable and probable to require future economic outflow - The Company accrues liabilities for legal and tax matters when the amount is reasonably estimable and settlement is probable to require an outflow of future economic benefits[47](index=47&type=chunk)

[Condensed Interim Consolidated Financial Statements](index=1&type=section&id=Condensed%20Interim%20Consolidated%20Financial%20Statements) [Condensed Interim Consolidated Statements of Financial Position](index=2&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Financial%20Position) Total assets slightly decreased to **$151,128 thousand** at June 30, 2022, driven by lower current assets, partially offset by increased exploration interests Consolidated Statements of Financial Position (Thousands of Canadian Dollars) | Item | June 30, 2022 | December 31, 2021 | | :--------------------------------- | :------------ | :------------------ | | **ASSETS** | | | | Cash and cash equivalents | $36,486 | $40,313 | | Marketable securities | $617 | $840 | | Receivables | $4,290 | $7,254 | | Prepaid expenses | $2,807 | $5,789 | | Total Current Assets | $44,200 | $54,196 | | Exploration and evaluation interests | $86,921 | $75,531 | | Capital assets | $18,075 | $18,775 | | **Total Assets** | **$151,128** | **$154,962** | | **LIABILITIES** | | | | Accounts payable and accrued liabilities | $13,184 | $12,537 | | Flow-through share premium liability | $6,208 | $12,413 | | Total Current Liabilities | $19,819 | $25,444 | | Provision for closure and reclamation | $3,415 | $5,151 | | **Total Liabilities** | **$23,991** | **$31,413** | | **SHAREHOLDERS' EQUITY** | | | | Capital stock | $416,977 | $361,982 | | Deficit | $(322,744) | $(279,041) | | **Total Shareholders' Equity** | **$127,137** | **$123,549** | | **Total Liabilities and Shareholders' Equity** | **$151,128** | **$154,962** | [Condensed Interim Consolidated Statements of Loss and Comprehensive Loss](index=3&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Loss%20and%20Comprehensive%20Loss) Net loss for the six months ended June 30, 2022, improved to **$43,703 thousand**, primarily due to reduced exploration and share-based payment expenses Consolidated Statements of Loss and Comprehensive Loss (Thousands of Canadian Dollars) | Item | For the three months ended June 30, 2022 | For the three months ended June 30, 2021 | For the six months ended June 30, 2022 | For the six months ended June 30, 2021 | | :------------------------------------ | :--------------------------------------- | :--------------------------------------- | :------------------------------------- | :------------------------------------- | | Administrative salaries | $1,209 | $529 | $1,772 | $1,219 | | Communications | $649 | $328 | $1,202 | $571 | | Consulting | $128 | $1,164 | $254 | $1,890 | | Exploration and evaluation | $22,955 | $23,619 | $42,959 | $52,812 | | Flow-through share premium recovery | $(4,246) | $(4,991) | $(7,114) | $(8,031) | | Loss (gain) on marketable securities | $1,023 | $(2,350) | $(771) | $(1,726) | | Share-based payments | $1,903 | $6,708 | $3,072 | $7,461 | | **Net loss and comprehensive loss for the period** | **$(24,687)** | **$(25,984)** | **$(43,703)** | **$(55,896)** | | Loss per share – basic and diluted | $(0.36) | $(0.44) | $(0.65) | $(1.00) | | Weighted average number of common shares outstanding | 69,059,604 | 58,400,736 | 67,447,971 | 55,895,868 | [Condensed Interim Consolidated Statements of Changes in Shareholders' Equity](index=4&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) Total shareholders' equity increased to **$127,137 thousand** at June 30, 2022, driven by capital stock increases from acquisitions and exercises, offset by net loss Consolidated Statements of Changes in Shareholders' Equity (Thousands of Canadian Dollars, except shares) | Item | Capital Stock (Shares) | Capital Stock (Amount) | Reserves (Stock Options) | Reserves (Restricted Share Units) | Reserves (Investment Rights) | Reserves (Warrants) | Deficit | Total Shareholders' Equity | | :------------------------------------------------ | :--------------------- | :--------------------- | :----------------------- | :------------------------------- | :--------------------------- | :------------------ | :-------- | :------------------------- | | Balance, December 31, 2021 | 65,392,363 | $361,982 | $23,710 | $198 | $2,500 | $14,200 | $(279,041) | $123,549 | | Acquisition of QuestEx Gold & Copper Ltd. | 1,082,553 | $9,528 | $267 | - | - | $61 | - | $9,856 | | Exercise of options | 456,456 | $3,605 | $(1,198) | - | - | - | - | $2,407 | | Vesting of Restricted Share Units | 48,074 | $200 | - | $(200) | - | - | - | - | | Exercise of warrants | 2,812,500 | $41,701 | - | - | - | $(11,326) | - | $30,375 | | Share issue costs | - | $(39) | - | - | - | - | - | $(39) | | Share-based payments | - | - | $3,879 | $813 | - | - | - | $4,692 | | Loss for the period | - | - | - | - | - | - | $(43,703) | $(43,703) | | **Balance, June 30, 2022** | **69,791,946** | **$416,977** | **$26,658** | **$811** | **$2,500** | **$2,935** | **$(322,744)** | **$127,137** | | **Total Liabilities and Shareholders' Equity** | **151,128** | **154,962** | | | | | | | [Condensed Interim Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities decreased to **$41,231 thousand**, while investing activities shifted to a net inflow, and financing activities provided **$32,568 thousand** Consolidated Statements of Cash Flows (Thousands of Canadian Dollars) | Activity | For the six months ended June 30, 2022 | For the six months ended June 30, 2021 | | :-------------------------------------------------- | :------------------------------------- | :------------------------------------- | | **OPERATING ACTIVITIES** | | | | Loss for the period | $(43,703) | $(55,896) | | Flow-through share premium recovery | $(7,114) | $(8,031) | | Share-based payments | $4,692 | $8,364 | | Net cash used in operating activities | $(41,231) | $(62,691) | | **INVESTING ACTIVITIES** | | | | Consideration paid on acquisition of QuestEx Gold & Copper Ltd. | $(18,749) | - | | Cash acquired on acquisition of QuestEx Gold & Copper Ltd. | $5,037 | - | | Proceeds from sale of assets acquired from QuestEx Gold & Copper Ltd. | $19,341 | - | | Net cash provided by (used in) investing activities | $4,836 | $(6,637) | | **FINANCING ACTIVITIES** | | | | Private placements | - | $21,553 | | Bought deal financing | - | $57,500 | | Proceeds from warrant exercises | $30,375 | - | | Proceeds from option exercises | $2,407 | $6,737 | | Net cash provided by financing activities | $32,568 | $86,901 | | **Change in cash and cash equivalents during the period** | **$(3,827)** | **$17,573** | | Cash and cash equivalents, beginning of the period | $40,313 | $37,821 | | **Cash and cash equivalents, end of the period** | **$36,486** | **$55,394** | | Cash | $26,829 | $20,165 | | Cash equivalents | $9,657 | $35,229 | | **Cash and cash equivalents, end of the period** | **$36,486** | **$55,394** | [Notes to the Condensed Interim Consolidated Financial Statements](index=6&type=section&id=NOTES%20TO%20THE%20CONDENSED%20INTERIM%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) [1. Nature of Operations](index=6&type=section&id=1.%20NATURE%20OF%20OPERATIONS) Skeena Resources, an exploration-stage company, relies on share issuances for funding, with key activities including Golden Triangle Transport Corp. incorporation and QuestEx acquisition - Skeena Resources Limited is an exploration-stage company focused on mineral properties in British Columbia, Canada, with its stock trading on TSX, NYSE, and Frankfurt Stock Exchange[10](index=10&type=chunk) - The Company's ability to continue as a going concern is dependent on successful execution of its business plan, raising additional capital, or evaluating strategic alternatives for its mineral property interests, with future funding expected primarily through share issuances[11](index=11&type=chunk) - On February 23, 2022, the Company incorporated Golden Triangle Transport Corp. for regulatory compliance related to the Eskay Creek property, and on June 1, 2022, it acquired QuestEx Gold & Copper Ltd[12](index=12&type=chunk) [2. Basis of Presentation](index=6&type=section&id=2.%20BASIS%20OF%20PRESENTATION) These unaudited interim financial statements adhere to IAS 34, with consistent accounting policies, except for fair value estimation of acquired exploration assets - The financial statements are prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting, and do not include all disclosures required for full annual financial statements[13](index=13&type=chunk) - Accounting policies are consistent with the most recent annual consolidated financial statements, except for the fair values of exploration and evaluation assets acquired, which are capitalized at their estimated fair value at acquisition[14](index=14&type=chunk)[15](index=15&type=chunk) [3. New Standards, Amendments and Interpretations Adopted](index=7&type=section&id=3.%20NEW%20STANDARDS,%20AMENDMENTS%20AND%20INTERPRETATIONS%20ADOPTED) Amendments to IAS 16 (effective Jan 2022) and IAS 1 (effective Jan 2023) were adopted, clarifying asset cost and liability classification, with no material financial impact expected - Amendments to IAS 16, Property, Plant and Equipment, adopted on January 1, 2022, prohibit deducting proceeds from selling items produced while preparing an asset for its intended use from the asset's cost; instead, these are recognized as sales proceeds and related cost of sales in profit or loss[16](index=16&type=chunk)[17](index=17&type=chunk) - Amendments to IAS 1, Classification of Liabilities as Current or Non-Current, effective January 1, 2023, clarify that liability classification is based on rights in place at the reporting period end, unaffected by expectations of deferring settlement, and settlement includes transfers of cash, equity, other assets, or services[18](index=18&type=chunk)[19](index=19&type=chunk) [4. Financial Instruments and Risk Management](index=8&type=section&id=4.%20FINANCIAL%20INSTRUMENTS%20AND%20RISK%20MANAGEMENT) The Company manages financial instruments, including marketable securities at fair value, credit, market, and liquidity risks, noting increased COVID-19 operational costs without material negative impact Financial Instruments Carrying Values (Thousands of Canadian Dollars) | Financial Instrument | Category | June 30, 2022 | December 31, 2021 | | :------------------- | :--------------- | :------------ | :------------------ | | Cash and cash equivalents | Amortized cost | $36,486 | $40,313 | | Marketable securities | Fair value through profit or loss | $617 | $5,092 | | Receivables | Amortized cost | $41 | $56 | | Accounts payable | Amortized cost | $9,761 | $10,950 | - Marketable securities are measured using Level 1 inputs in the fair value hierarchy[21](index=21&type=chunk) A **10% change** in marketable securities' share price would result in a **$62,000 change** to their carrying value and unrealized gain[22](index=22&type=chunk) - The Company manages liquidity risk by forecasting cash flows and reviewing expenditures, with accounts payable generally due within 90 days[23](index=23&type=chunk) A reclamation security of **$15,950,000** is provided via a surety bond[24](index=24&type=chunk) - COVID-19 has increased operational costs (health, safety, housing) and material input inflation, but has not materially negatively affected the Company's operations to date; the duration and impact of the pandemic remain uncertain[25](index=25&type=chunk)[26](index=26&type=chunk) [5. Receivables](index=10&type=section&id=5.%20RECEIVABLES) Receivables decreased to **$4,290 thousand** at June 30, 2022, mainly due to reduced GST receivables and a slight decrease in METC Receivables Breakdown (Thousands of Canadian Dollars) | Item | June 30, 2022 | December 31, 2021 | | :-------------------------------- | :------------ | :------------------ | | Mineral Exploration Tax Credit ("METC") | $3,350 | $3,793 | | Goods and services tax | $899 | $3,405 | | Other | $41 | $56 | | **Total** | **$4,290** | **$7,254** | [6. Transactions with QuestEx and Newmont Corporation](index=10&type=section&id=6.%20TRANSACTIONS%20WITH%20QUESTEX%20AND%20NEWMONT%20CORPORATION) Skeena acquired QuestEx Gold & Copper Ltd. for **$41,250 thousand** as an asset acquisition, concurrently selling properties to Newmont for **$25,598 thousand** - On June 1, 2022, Skeena acquired all common shares of QuestEx Gold & Copper Ltd. for **$0.65 cash** and **0.0367 Skeena common shares** per QuestEx share, including replacement options and warrants[28](index=28&type=chunk) - The QuestEx Transaction was accounted for as an asset acquisition, not a business combination, as QuestEx did not meet the definition of a business under IFRS 3[30](index=30&type=chunk) Consideration Paid and Net Assets Acquired from QuestEx (Thousands of Canadian Dollars) | Item | Amount | | :---------------------------------------------------------------- | :----- | | **Consideration Paid:** | | | Cash paid | $18,749 | | Shares issued (1,058,597 shares) | $9,178 | | Promissory note issued to Newmont | $6,257 | | Replacement Options | $267 | | Replacement Warrants | $61 | | QuestEx shares held by Skeena prior to QuestEx Transaction | $5,499 | | Transaction costs | $1,239 | | **Total Consideration** | **$41,250** | | **Net Assets Acquired:** | | | Cash | $5,037 | | Marketable securities | $253 | | Receivables | $74 | | Prepaid expenses | $43 | | Reclamation deposits | $225 | | Exploration and evaluation assets | $38,718 | | Accounts payable and accrued liabilities | $(2,191) | | Flow-through share premium liability | $(909) | | **Total Net Assets Acquired** | **$41,250** | - Concurrent with the QuestEx acquisition, Skeena sold certain QuestEx properties (Northern Properties) to Newmont Corporation for **$25,598 thousand**, receiving **$19,341 thousand** in cash and settling a **$6,257 thousand** promissory note[29](index=29&type=chunk)[34](index=34&type=chunk) [7. Exploration and Evaluation Interests](index=12&type=section&id=7.%20EXPLORATION%20AND%20EVALUATION%20INTERESTS) Skeena holds 100% interest in key BC mineral properties, with exploration assets increasing to **$86,921 thousand** and expenses totaling **$42,959 thousand**, mainly for Eskay Creek [Property Interests](index=12&type=section&id=Property%20Interests) Skeena holds 100% interest in Eskay Creek, KSP, Kingpin, and Sofia, with Snip under option and Spectrum returned for conservancy - Skeena holds **100% interest** in Eskay Creek, KSP, Kingpin, and Sofia properties in British Columbia[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk)[40](index=40&type=chunk) - The Snip property is subject to an option agreement with Hochschild Mining Holdings Limited, which, if successfully completed, would establish a joint venture[38](index=38&type=chunk)[39](index=39&type=chunk) - The Spectrum property was returned by Skeena to facilitate the creation of a new conservancy for environmental and wildlife protection in Tahltan territory[41](index=41&type=chunk) [Exploration and Evaluation Assets](index=14&type=section&id=Exploration%20and%20Evaluation%20Assets) Exploration and evaluation assets increased to **$86,921 thousand** at June 30, 2022, mainly due to QuestEx property acquisition, offset by closure liability adjustments Exploration and Evaluation Assets (Thousands of Canadian Dollars) | Item | Eskay | KSP | Kingpin | Snip | Sofia | Total | | :-------------------------------- | :---- | :---- | :------ | :--- | :---- | :------ | | Balance, December 31, 2021 | $74,444 | $ - | $ - | $1,087 | $ - | $75,531 | | Adjust closure liability | $(1,014) | - | - | $(722) | - | $(1,736) | | Additions | $6 | - | - | - | - | $6 | | Acquisition of QuestEx properties | - | $7,872 | $3,936 | - | $1,312 | $13,120 | | **Balance, June 30, 2022** | **$73,436** | **$7,872** | **$3,936** | **$365** | **$1,312** | **$86,921** | [Exploration and Evaluation Expenses](index=14&type=section&id=Exploration%20and%20Evaluation%20Expenses) Total exploration and evaluation expenses for the six months ended June 30, 2022, were **$42,959 thousand**, primarily on Eskay Creek, with no expenses on KSP and Kingpin Exploration and Evaluation Expenses (Thousands of Canadian Dollars) - Six Months Ended June 30, 2022 | Item | Eskay | Snip | Sofia | Total | | :------------------------------------ | :---- | :--- | :---- | :---- | | Geology, geophysics, and geochemical | $10,741 | $18 | $10 | $10,769 | | Fieldwork, camp support | $9,359 | $89 | $46 | $9,494 | | Drilling | $4,883 | - | - | $4,883 | | Equipment rental | $3,640 | $3 | $3 | $3,646 | | Environmental studies | $2,654 | $100 | - | $2,754 | | Transportation and logistics | $2,610 | $1 | $1 | $2,612 | | Share-based payments | $1,620 | - | - | $1,620 | | Fuel | $1,499 | - | $6 | $1,505 | | Assay and analysis/storage | $1,360 | $239 | - | $1,599 | | Helicopter | $1,147 | - | $16 | $1,163 | | Camp and safety | $1,178 | - | - | $1,178 | | **Total for the period** | **$42,399** | **$478** | **$82** | **$42,959** | Exploration and Evaluation Expenses (Thousands of Canadian Dollars) - Three Months Ended June 30, 2022 | Item | Eskay | Snip | Sofia | Total | | :------------------------------------ | :---- | :--- | :---- | :---- | | Geology, geophysics, and geochemical | $4,982 | $18 | $10 | $5,010 | | Fieldwork, camp support | $4,774 | $46 | $46 | $4,866 | | Drilling | $4,300 | - | - | $4,300 | | Equipment rental | $1,378 | $2 | $3 | $1,383 | | Environmental studies | $1,361 | $75 | - | $1,436 | | Transportation and logistics | $1,383 | - | $1 | $1,384 | | Share-based payments | $877 | - | - | $877 | | Fuel | $814 | - | $6 | $820 | | Helicopter | $885 | - | $16 | $901 | | Camp and safety | $763 | - | - | $763 | | **Total for the period** | **$22,715** | **$158** | **$82** | **$22,955** | - No exploration and evaluation expenses were incurred on KSP and Kingpin properties during the three and six months ended June 30, 2022[44](index=44&type=chunk)[45](index=45&type=chunk) [8. Marketable Securities](index=16&type=section&id=8.%20MARKETABLE%20SECURITIES) Marketable securities significantly decreased to **$617 thousand** at June 30, 2022, mainly due to QuestEx share derecognition, partially offset by new acquisitions and unrealized gain Marketable Securities Continuity Schedule (Thousands of Canadian Dollars) | Item | Cost | Fair Value | | :---------------------------------------------------- | :----- | :--------- | | Balance, December 31, 2021 | $3,883 | $5,092 | | Derecognition of QuestEx shares held upon closing of QuestEx Transaction | $(3,415) | $(5,499) | | Acquired upon closing of QuestEx Transaction | $253 | $253 | | Unrealized gain | - | $771 | | **Balance, June 30, 2022** | **$721** | **$617** | - During the six months ended June 30, 2022, the Company recognized an unrealized gain on marketable securities of **$771,000**, compared to a total gain of **$1,726,000** (comprising realized and unrealized gains) in the prior year period[48](index=48&type=chunk) [9. Capital Assets](index=17&type=section&id=9.%20CAPITAL%20ASSETS) Capital assets carrying value slightly decreased to **$18,075 thousand** at June 30, 2022, influenced by additions, disposals, depreciation, and Right-of-Use asset transfers Capital Assets Carrying Value (Thousands of Canadian Dollars) | Category | December 31, 2021 | June 30, 2022 | | :-------------------------- | :---------------- | :-------------- | | Computer Hardware & Software | $41 | $35 | | Equipment | $2,001 | $1,570 | | Buildings & Structures | $12,120 | $15,394 | | Right-of-Use Asset - Office Lease | $1,017 | $898 | | Right-of-Use Asset - Equipment Leases | $1,293 | $178 | | Leasehold Improvements | $2,303 | $ - | | **Total Carrying Value** | **$18,775** | **$18,075** | - During the six months ended June 30, 2022, the Company sold equipment with a carrying value of **$342,000** for **$255,000**, resulting in a loss of **$87,000** recorded in exploration and evaluation expenses[49](index=49&type=chunk) [10. Related Party Transactions](index=18&type=section&id=10.%20RELATED%20PARTY%20TRANSACTIONS) Key management compensation decreased to **$4,743 thousand** for the six months ended June 30, 2022, mainly due to reduced share-based payments, with minor related party transactions Key Management Compensation (Thousands of Canadian Dollars) | Item | 2022 | 2021 | | :-------------------------------- | :--- | :--- | | Director remuneration | $88 | $118 | | Officer & key management remuneration | $1,712 | $748 | | Share-based payments | $2,943 | $7,535 | | **Total Key Management Compensation** | **$4,743** | **$8,401** | - Share-based payment expenses to related parties recorded in exploration and evaluation expense and general and administrative expense amounted to **$691,000** and **$2,252,000**, respectively, for the six months ended June 30, 2022[50](index=50&type=chunk) - The Company recovered **$5,000** in salaries from a company with a common officer during the six months ended June 30, 2022, and had **$10,000** in receivables from such companies at period-end[51](index=51&type=chunk)[52](index=52&type=chunk) [11. Flow-Through Share Premium Liability](index=18&type=section&id=11.%20FLOW-THROUGH%20SHARE%20PREMIUM%20LIABILITY) Flow-through share premium liability decreased to **$6,208 thousand** at June 30, 2022, due to expenditure settlement, with remaining CEE commitments of **$15,350 thousand** and **$3,198 thousand** Flow-Through Share Premium Liability Continuity Schedule (Thousands of Canadian Dollars) | Item | Amount | | :---------------------------------------------------------------- | :----- | | Balance, December 31, 2021 | $12,413 | | Assumption of flow-through share premium liability upon acquisition of QuestEx | $909 | | Settlement of flow-through share premium liability pursuant to qualified expenditures | $(7,114) | | **Balance, June 30, 2022** | **$6,208** | - As of June 30, 2022, the Company had a remaining commitment of **$15,350,000** to incur qualifying Canadian exploration expenses (CEE) from its 2021 flow-through share issuances, and an additional **$3,198,000** from the QuestEx acquisition, both to be satisfied by December 31, 2022[54](index=54&type=chunk)[55](index=55&type=chunk) [12. Capital Stock and Reserves](index=19&type=section&id=12.%20CAPITAL%20STOCK%20AND%20RESERVES) Capital stock and reserves saw significant activity, including 2021 financings, Tahltan Investment Rights, and 2022 share-based payments, with specific weighted average exercise prices for options and warrants [Authorized Shares](index=19&type=section&id=Authorized%20Shares) The Company is authorized to issue an unlimited number of voting common shares without par value - The Company is authorized to issue an unlimited number of voting common shares without par value[56](index=56&type=chunk) [Private Placements and Public Offerings](index=19&type=section&id=Private%20Placements%20and%20Public%20Offerings) In 2021, the Company raised **$21,553 thousand** through private placements and **$57,500 thousand** via a bought deal public offering - In March and April 2021, the Company completed three tranches of non-brokered private placements, raising a total of **$21,553,000** by issuing **1,197,398 flow-through shares** at **$18.00 per share**[57](index=57&type=chunk)[58](index=58&type=chunk) - On May 17, 2021, a bought deal public offering raised **$57,500,000** by issuing **4,637,097 common shares** at **$12.40 per common share**[58](index=58&type=chunk) [Tahltan Investment Rights](index=19&type=section&id=Tahltan%20Investment%20Rights) The Tahltan Central Government invested **$5,000,000** in Skeena via Tahltan Investment Rights, with **199,642** rights converting to common shares by July 2021 - On April 16, 2021, the Tahltan Central Government invested **$5,000,000** by purchasing **399,285 Tahltan Investment Rights**, which convert into common shares upon achievement of key Company and permitting milestones or over time[59](index=59&type=chunk) - By July 19, 2021, Milestones 2 and 3 were met, resulting in the conversion of **199,642 Rights** into **199,642 common shares** valued at **$2,500,000**[59](index=59&type=chunk) [Share-based Payments](index=20&type=section&id=Share-based%20Payments) Skeena granted **103,264** stock options and **522,054** RSUs, and issued shares, replacement options, and warrants as part of the QuestEx acquisition - On April 21, 2022, the Company granted **103,264 stock options** with a 5-year term and a weighted average fair value of **$675,000**, vesting over 36 months[61](index=61&type=chunk) - On April 21, 2022, the Company granted **522,054 Restricted Share Units (RSUs)** with a fair value of **$6,787,000**, vesting on April 21, 2024, or over 24 months for a portion[62](index=62&type=chunk)[63](index=63&type=chunk) - As part of the QuestEx Transaction, Skeena issued **1,058,597 common shares** (**$9,178,000**), **77,158 Replacement Options** (**$267,000**), and **150,691 Replacement Warrants** (**$61,000**)[64](index=64&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk) Share Purchase Warrant, RSU, and Stock Option Transactions Summary | Item | Warrants (Number) | Warrants (Weighted Average Exercise Price) | RSUs (Number) | Stock Options (Number) | Stock Options (Weighted Average Exercise Price) | | :-------------------------------- | :---------------- | :----------------------------------------- | :------------ | :--------------------- | :-------------------------------------------- | | Outstanding, December 31, 2021 | 2,812,500 | $10.80 | 56,074 | 5,275,124 | $10.18 | | Granted | - | - | 522,054 | 103,264 | $13.00 | | Exercised | (2,812,500) | $10.80 | (48,074) | (456,456) | $5.27 | | Cancelled | - | - | (3,096) | (44,634) | $12.73 | | Replacement Warrants (Note 6) | 150,691 | $14.19 | - | - | - | | Replacement Options (Note 6) | - | - | - | 77,158 | $9.87 | | **Outstanding, June 30, 2022** | **150,691** | **$14.19** | **526,958** | **4,954,456** | **$10.67** | | Exercisable, June 30, 2022 | 150,691 | $14.19 | - | 3,265,274 | $9.69 | [13. Supplemental Disclosure with Respect to Cash Flows](index=24&type=section&id=13.%20SUPPLEMENTAL%20DISCLOSURE%20WITH%20RESPECT%20TO%20CASH%20FLOWS) Non-cash transactions for the six months ended June 30, 2022, included **$208 thousand** in capital asset additions and **$16 thousand** from equipment sales, with no interest or income tax payments Non-Cash Transactions (Thousands of Canadian Dollars) | Item | 2022 | 2021 | | :---------------------------------------------------- | :--- | :--- | | Capital asset additions included in accounts payable and accrued liabilities | $208 | $ - | | Proceeds from sale of equipment recorded in receivables | $16 | $ - | - The Company did not make any payments towards interest or income taxes during the six months ended June 30, 2022 and 2021[72](index=72&type=chunk) [14. Contingencies](index=24&type=section&id=14.%20CONTINGENCIES) The Company faces legal and tax contingencies, including claims related to Spectrum property and Albino Lake Storage Facility, with no material financial impact expected - Eilat Exploration Ltd. has asserted claims against the Company related to the Asset Purchase Agreement for the Spectrum property, with an application to dismiss one claim adjourned[74](index=74&type=chunk) - The Company is appealing a Chief Gold Commissioner's decision that an individual owns materials in the Albino Lake Storage Facility, which contains tailings and minerals from the former Eskay Creek Mine[75](index=75&type=chunk) - The outcomes of these legal matters are not determinable at this time, but they are not expected to have a material effect on the Company's financial statements[74](index=74&type=chunk)[75](index=75&type=chunk) [15. Subsequent Events](index=24&type=section&id=15.%20SUBSEQUENT%20EVENTS) Subsequent to June 30, 2022, Skeena issued conditional Performance-Linked Options and RSUs, and acquired three additional properties in the Golden Triangle area - Subsequent to June 30, 2022, the Company issued conditional Performance-Linked Options (maximum **275,616**) and Performance-Linked RSUs (maximum **975,684**), vesting based on ESG criteria and Eskay Creek Feasibility Study results[76](index=76&type=chunk) - The Company also granted **50,000 RSUs** and **50,000 incentive stock options** for recruitment, retention, and incentive purposes, with specific vesting schedules[77](index=77&type=chunk) - Skeena entered into an asset purchase agreement with Coast Copper Corp. to acquire three properties totaling **8,724 hectares** in the Golden Triangle area, near Eskay, for **$3,000,000** payable in semi-annual cash and share payments[78](index=78&type=chunk)

Exhibit 99.1 Condensed Interim Consolidated Financial Statements Three months ended March 31, 2022 and 2021 (Unaudited) SKEENA RESOURCES LIMITED CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited - expressed in thousands of Canadian dollars) | | Note | | March 31, 2022 | | December 31, 2021 | | --- | --- | --- | --- | --- | --- | | ASSETS | | | | | | | Current | | | | | | | Cash and cash equivalents | | $ | 56,839 | $ | 40,313 | | Marketable securities | 8 | | 480 | | 840 | | Receiva ...