TSX-V-listed Skeena Resources has signed a definitive agreement with gold major Barrick Gold, pursuant to which it will acquire the Eskay Creek gold/silver project, in the Golden Triangle of north-west British Columbia, Canada.
As a result of the transaction, Barrick will become a significant shareholder in Skeena.
On closing in the fourth quarter, Skeena will gain 100% ownership and operatorship of Eskay Creek, which it plans to revitalise as an openpit gold/silver mine.
“We were encouraged by the positive market reaction to the announcement of the binding term sheet in respect to the Eskay Creek transaction with Barrick and are delighted to now announce the signing of the definitive agreement,” said CEO Walter Coles.
Consideration for the transaction consists of the issuance by Skeena of 22 500 000 units, each comprising one common share of Skeena and one half of a warrant, with each whole warrant entitling Barrick to purchase one additional common share of Skeena at an exercise price of C$2.70 each until the second anniversary of the closing date. The transaction also includes a 1% net smelter royalty on the entire Eskay Creek land package and a contingent payment of C$15-million payable during a 24-month period after closing.
Prior to entering into the option agreement, Barrick directly and indirectly held 1 575 000 common shares, representing about 0.8% of Skeena’s then-issued and outstanding common shares. On the closing of the transaction, Barrick will own about 12.4% of Skeena’s issued and outstanding common shares and assuming the exercise in full of all of the warrants issuable pursuant to the transaction, Barrick will hold about 17.2% of Skeena.