Vancouver, BC (December 18, 2017) Skeena Resources Limited (TSX.V: SKE) (“Skeena” or the “Company”) is pleased to announce the signing of an agreement with Barrick Gold Inc. (“Barrick”), granting an option (the “Option”) for the Company to acquire a 100% interest in the past-producing Eskay Creek property (“Eskay” or the “Property”) located in the Golden Triangle of northwest British Columbia. Barrick Gold Corporation will also complete a strategic investment with the Company for gross proceeds of C$1 million.
Skeena’s CEO, Walter Coles Jr. commented, “Eskay Creek was a remarkable discovery that became an extraordinary mine. It produced 3.3 million ounces of gold and 160 million ounces of silver from 2.2 million tonnes of ore from 1994 until closure in 2008. We are honoured that Barrick has given us an opportunity to investigate and potentially revitalize one of Canada’s highest-grade past-producing mines.”
Under the terms of the option agreement, Skeena may acquire a 100% interest in Eskay in consideration for:
- Incurring C$3,500,000 in exploration expenditures on the Property prior to December 18, 2020 of which C$1,500,000 must be incurred prior to December 18, 2019 (“Exploration Requirement”);
- Payment to Barrick of C$10,000,000 (“Purchase Price”) once (i) the Exploration Requirement has been met (ii) all regulatory approvals have been received and (iii) all permit transfers and underlying agreement consents have been obtained; and
- Reimbursing Barrick for (i) reclamation expenditures incurred during the Option period and (ii) assuming the bond amount on the Property, collectively up to a maximum amount of C$7,700,000, provided that the Purchase Price will be reduced if those amounts, in aggregate, exceed C$7,700,000.
Barrick will retain a 1.0% NSR on all parts of the Property which are not already subject to royalties. In addition, Barrick will maintain a back-in right to purchase a 51% interest in the Property. The back-in right may only be exercised by Barrick for a 12-month period following notification by Skeena of a NI 43-101 resource on the Property of at least 1,500,000 ounces of contained gold (or equivalent).
To exercise the back-in right, Barrick will pay Skeena up to three times its cumulative expense on the property. As part of the back-in Barrick would also reimburse to Skeena the Purchase Price and assume any bonding requirement for its proportionate interest, following which the parties will form a joint venture.
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