Okay, thank you, Todd. Good afternoon, everybody, and thank you so much for joining the presentation today. Before we get started, I will be making forward-looking statements, so you are duly cautioned. I’d like to just start off with a little bit of the history of our flagship asset, Eskay Creek. It is an iconic and legendary asset in that it was a past-producing underground mine that was previously owned and operated by Barrick. The reason why it is iconic and legendary is because, in its past life, Eskay Creek was the highest-grade gold mine in the entire world. The ore was so rich that the average mine grade was 45 grams per ton gold, and on the silver side, it averaged over 2,000 grams per ton. Barrick placed the mine on care and maintenance in 2008.
If you recall, that was the global financial crisis, so gold was about $600 an ounce. But what really started and sparked the interest for Skeena was that the cutoff grade was 15 grams per ton. So we started looking at Eskay Creek in 2017 with the thesis of what could possibly be left behind if the cutoff grade was 15 grams per ton. So we've been advancing this asset for about 10 years now. We've done a lot of work to date, including multiple technical reports. We've attained project financing, so we're fully financed. But we will be doing it differently. So we are reconceptualizing Eskay Creek as a very sizable open pit. We are expecting annual production of about 450,000 ounces of gold-equivalent metal per year, so very, very robust. This will be backed by a very strong grade profile.
It will be one of the highest-grade open-pit mines in the world at 5.5 grams per ton equivalent, and that's triple the global open-pit average. When the grade is this good, the costs are phenomenal, so our costs are at the bottom of the industry cost curve, and the profitability on this mine is fantastic. At spot prices today, we're expecting annual after-tax free cash flow of about $1 billion per year in the first five years of the mine life. There's a very strong silver component, and as I stated, we are fully financed. The project is located in northwest B.C. in an area that's called the Golden Triangle. The Golden Triangle is known for immense geological potential, so it's absolutely no coincidence that Teck and Newmont have established platforms in this area.
The other thing to note is that the project is situated on Tahltan territory. That is the Indigenous group with whom we are advancing the asset. We have a very collaborative and positive relationship with the Tahltan Nation. We are very, very proud to have the first Section 7 agreement in Canadian history, which means that the Tahltan Nation will be the first Indigenous government to greenlight our construction together with the province of BC. The other interesting development on the political side is that, if you recall, in February, the Trump administration imposed tariffs, and in response, our provincial government put out a list of projects they want to fast-track to offset the negative implications of the tariffs and promote socioeconomic growth in our province, and within that list, SK Creek was at the very top.
We are in the environmental assessment application phase right now. We are marching towards the finish line. We started the process about 18 months ago when we filed our initial application, and now we are in the final public engagement period, which will conclude on September 26th. We expect the nation to undergo a vote with regards to the IBA on the evening of October 9th, and we expect to have our permits, including the EA certificate and the Major Mines Act permit, in Q4 of this year. That will be the next major catalyst for our shareholders and for our investors as we continue to de-risk the asset going forward. We have substantial benefits in place as a past-producing asset. Barrick kindly left behind a fully permitted tailings facility.
This saves us CAD 150 million off the CapEx, as well as the contentiousness and timeline associated with permitting a tailings facility. Additionally, after Barrick placed the mine on care and maintenance, another company came in and coincidentally installed three hydroelectric facilities 17 kilometers away from our mine. These hydroelectric facilities allow us to source power for CAD 0.06 per kilowatt-hour. This is a very significant advantage to our profitability and one of the things that really makes us stand apart in the industry. To put it into perspective, if you look at some of the other mines within Canada that are located in more remote locations, some are paying 10 times that price for power. So this is a very big advantage. The 2023 DFS came out in late 2023. If we look at spot prices today, the NPV of the project is about CAD 5.5 billion.
Our market capitalization today is $3 billion. The IRR after-tax is 80%, and the payback period is 0.6 years, meaning that about 250 days of operating this mine will pay back the initial capital cost of the project. The financial metrics on the other side of production are equally astounding. At spot prices today, our annual EBITDA is projected to be $1.7 billion per year in the first five years of production. And if we do just a quick evaluation exercise, if we apply a multiple of 6 to that EBITDA, we get close to a $10 billion market cap valuation. If we look at our annual after-tax free cash flow of $1 billion in the first five years, you apply a conservative multiple of eight times, you can see that we arrive to an $8 billion market capitalization.
I like to walk through this because it gives investors an idea of where we as a company think the valuation of the company can be in two years' time as we execute and get into production in Q2 of 2027. The production profile is front-loaded, so we've optimized the grade and the ounces to be higher in years one through five. We have another asset in the portfolio called Snip, which is located 40 kilometers away from Eskay. It is also an ex-Barrick asset, also high-grade underground nine gram per ton material. The idea is to back bolt Snip into the mine plan in later years to smooth out this dip. And this is something that we will continue to work on as we get past the permitting process. I mentioned that the project is fully financed.
So last summer, when we came out with this financing package, the market loved it. This was a very innovative structure that had a lot of flexibility. Basically, we went with Orion for the full package for a total of CAD 1 billion against a projected initial CapEx of CAD 765 million, so we are overfunded. Out of the components, the equity piece was the smallest because we really wanted to minimize dilution. That's very important to us in the company as we only have 115 million shares issued and outstanding. The gold stream will fund the construction schedule in 2025, so we're drawing down on this stream in CAD 50 million tranches to take us through to the end of the year. Once we have secured the permits, we will look to draw down on the debt.
The debt has a variable interest rate of SOFR plus 7.75%, and there's a 1% standby fee and no break fee, meaning that between now and drawdown on the debt, if we find a more attractive cost of capital in the marketplace, we can go ahead and swap that out. We are working on a refinancing at the moment, and this could be a potential catalyst for Q1 of 2025, where we're looking to reduce the cost of capital on the debt by about 400 basis points. This really drives home the message as to why this asset is so desirable. When you look at the highest-grade operations in the world, you can see that our grade in years one through five is second from the top.
If you look at the life-of-mine grade, it is still in the top decile, and we know we will boost that grade higher with the incorporation of SNIP in later years. The reserve is very sizable. It's 4.6 million ounces, 80% of which is in the proven category for an ultra-high rate of confidence. And the value split is 65% gold, 35% silver. A lot of investors are very surprised to learn how much silver we actually have at SK Creek. So the 35% byproduct credit on the silver, because of the size of this operation, because of its scale, will make SK Creek one of the largest primary silver mines in the world. So our annual silver production in years 1 through 5 will be 9.5 million ounces per year. If you like silver, if you follow silver, I do personally.
And to put that into perspective, that's more silver than companies like Aya or Las Chispas off the byproduct credit. So very, very substantial, very, very meaningful. That silver is important to us because it allows us to command higher trading multiples, and it also is a very meaningful byproduct credit on our unit costs. So SK Creek, if you really want to think about it, it's a world-class gold asset, and it's a world-class silver vehicle as well. Obviously, with these types of grades, the costs are phenomenal, and we just like to drive the message here. The co-product cost is about 687 per ounce, and when we factor in the silver credits, it gets significantly lower than that. And this is my favorite slide because it really just talks about the valuation opportunity that we have ahead of us.
We use the framework, the Lassonde Curve, as a single asset developer. We have overlaid our share price over top because it has followed this framework to a T. So when we announced the financing package, the market loved it, and the share price responded and came out of the valley. But we still have two more years ahead of us to climb the Lassonde Curve as we advance through construction and get into cash flow. Our PNAV today at spot prices is about 0.5 times with a market cap of CAD 3 billion. And we believe conservatively that we can attain a multiple of 1.3 or 1.4 times NAV with the world-class gold and the world-class silver in a tier-one mining jurisdiction. The other way to look at it is by industry comps.
There is not a lot of companies that offer this type of scale with one asset, so there's really two that we speak to. Firstly, being Artemis Gold, which is a wonderful success story here in BC. They've recently commissioned. This year is their commissioning year, so they have stub production of about 200,000 ounces. They'll be making their way up to 500,000 ounces over the next two years. They have a market cap of $7 billion today. Then there's Lundin Gold, which is the sweetheart of the mining industry with Fruta del Norte in Ecuador, and they have a market cap of $22 billion. So what investors are telling us is that as we get into cash flow and production, our market valuations should fall somewhere in the middle between Artemis Gold and Lundin.
And again, all of that is consistent with the multiple approach that we did and all the other valuations that we looked at, in really going that a $10 billion market cap is a very realistic valuation for Skeena in the next two years. And just to end off here, the capital structure. So we've got 11 banks on the Canadian side that support us, 115 million shares out. We're 65% institutionally held, and pretty much all of the mining dedicated funds in our industry have a toehold in the stock and a very, very good relationship with us in that they're in it for the long term for the re-rating as we get into cash flow and production. I think I'm just about at time, so I'll leave it at that. Thank you.
Thanks, Galina. We have time for probably one question. No? Okay.
Okay. Thank you so much.