https://www.miningweekly.com

Skeena gains full ownership of past-producing Eskay Creek from Barrick

7th July 2020

By: Mariaan Webb

Creamer Media Senior Deputy Editor Online

     

Font size: - +

TSX-V-listed Skeena Resources will exercise its option to acquire the Eskay Creek gold/silver project, in the Golden Triangle of north-west British Columbia, from gold major Barrick Gold.

Barrick has also agreed to waive its back-in right on Eskay Creek.

As a result of the transaction, Barrick will be a significant shareholder in Skeena, owning about 12.4%. If Barrick were to exercise the warrants, its ownership of Skeena would increase to 17.2% on a partially diluted basis and Skeena would receive cash proceeds of C$30.4-million.

"Skeena is honoured to have Barrick as a significant shareholder as we endeavour to revitalise Eskay Creek, the former highest-grade, past-producing gold mine in the world,” said Skeena CEO Walter Coles in a statement on Monday.

He added that the recent improvements to infrastructure in the Golden Triangle offered Skeena an opportunity to potentially reopen closed mines and contribute to the economic development of communities in northern Canada.

“Gaining 100% ownership and operatorship of Eskay Creek is an important milestone in the evolution of our company. Skeena is well financed with almost C$50-million of cash and we continue to believe there are meaningful opportunities to increase the grade and size of this project with aggressive exploration drilling."

Under a binding agreement, Skeena and Barrick have agreed to amend the terms of the original option agreement. Skeena will now acquire a 100% ownership interest in Eskay Creek in consideration for the issuance to Barrick of 22.5-million units, with each unit comprising one common share of Skeena and a non-transferrable half warrant. Skeena will also grant a 1% net-smelter royalty on the entire Eskay Creek land package. Half of that royalty may be repurchased from Barrick during the 24-month period after closing, at a cost of C$17.5-million.

There is also a contingent payment, payable if Skeena sells more than a 50% interest in Eskay Creek during the 24-month period after closing, of C$15-million.

Barrick president and CEO Mark Bristow said in a statement that following the merger with Randgold and the creation of Nevada Gold Mines, which intensified its focus on tier-one and strategic assets, the group had continued to look for ways to bring its other assets to account.

Edited by Creamer Media Reporter

Comments

The functionality you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION