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Skeena to exercise Eskay Creek option with Barrick

Skeena Resources has signed a binding term sheet with Barrick Gold to exercise its option to acquire 100% of the Eskay Creek gold-silver project in the Golden Triangle of British Columbia, Canada.
Skeena to exercise Eskay Creek option with Barrick Skeena to exercise Eskay Creek option with Barrick Skeena to exercise Eskay Creek option with Barrick Skeena to exercise Eskay Creek option with Barrick Skeena to exercise Eskay Creek option with Barrick

Eskay Creek in British Columbia, Canada

Staff reporter

Skeena will issue Barrick 22.5 million units including a share and half a warrant exercisable at C$2.70. It is expected that Barrick will own about 12.4% of Skeena's shares after closing.

Barrick will also receive a 1% net smelter returns royalty on the entire Eskay Creek land package, half of which Skeena may repurchase within two years for C$17.5 million. Barrick waived its back-in right on Eskay Creek.

"The recent improvements to infrastructure in the Golden Triangle offer us 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," said CEO Walter Coles.

"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."

A preliminary economic assessment for Eskay Creek released in November 2019 outlined average annual production of 236,000oz of gold and 5.8Moz of silver over 8.6 years following an initial capex of US$233 million. Skeena has started a pre-fesibility study.

Eskay Creek hosts a February 2019 pit constrained mineral resource estimate of 12.7 million tonnes grading 4.3g/t gold and 1,110g/t silver for 1.7Moz gold and 44.7Moz silver. It also hosts an inferred resource of 14.4Mt grading 2.3g/t gold and 47g/t silver for 1.1Moz gold and 778,000oz silver.

Skeena signed the original deal for Eskay Creek with Barrick in December 2017. Discovered in 1988, Eskay produced about 3.3 million ounces of gold and 160Moz of silver at average grades of 45g/t gold and 2,224g/t silver.

Shares in Skeena Resources are trading at C$2.38, valuing the company at $341 million.