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Skeena strikes C$21.2 million deal with Barrick

Canadian junior Skeena Resources (CN:SKE) is looking to potentially revitalise the “extraordinary” Eskay Creek gold mine in British Columbia’s Golden Triangle after striking a C$21.2 million (US$16.5 million) deal with major Barrick Gold (CN:ABX).
Skeena strikes C$21.2 million deal with Barrick Skeena strikes C$21.2 million deal with Barrick Skeena strikes C$21.2 million deal with Barrick Skeena strikes C$21.2 million deal with Barrick Skeena strikes C$21.2 million deal with Barrick

The Eskay Creek camp, pictured in 1989

Staff reporter

It is the second Barrick asset Skeena hopes to revive after acquiring the major's former high-grade Snip gold mine, also in British Columbia, in July.

Under the Eskay option agreement, Skeena can acquire 100% by paying C$10 million and spending C$3.5 million on exploration, plus reimbursing Barrick's reclamation expenses during the option period and assuming the bond amount to a collective total of $7.7 million.

Barrick will invest C$1 million in Skeena shares at 80c each, retain a 1% net smelter royalty on all parts of the property not already subject to royalties, and can buy back 51% by paying Skeena up to three-times its expenses on the project and reimbursing the purchase price.

Barrick is continuing its strategy of funding junior explorers and invested US$7.2 million last month to take a 15% stake in South American-focused explorer Reunion Gold Corp (CN:RGD).

Skeena said it was reviewing more than 20 years of exploration and production information that Barrick had held confidentially since Eskay closed in 2008.

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 and was once the world's highest-grade gold mine and fifth-largest silver mine by volume, Skeena said.

The company has started the permitting process for surface drilling.

Skeena ended September with a working capital deficit of C$920,004 but raised C$6 million (US$4.8 million) in a private placement in October that was supported by Zijin Mining (HK:2899) and Sprott.

Skeena shares rose 9.8% to C67c, capitalising it just over $50 million.

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