This the deal on Eskay Creek property.
19 December 2017 CommentsShare
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.
Snip property agreement.
Skeena’s CEO, Walter Coles commented, “As a result of gaining 100% ownership of Snip, the Company will now be able to enter the historical mine workings and initiate an underground drill program. From underground, we should be able to more accurately drill into gold bearing structures that are subparallel to the Twin Vein. Also, drilling from underground will allow us to operate the project on a year-round basis.”
Per the terms of the Option Agreement, Skeena was required to issue to Barrick a total of 3,250,000 common shares of the Company of which 2,000,000 were issued at the time of signing the Option Agreement and the remaining 1,250,000 common shares were issued as of July 19, 2017. Skeena has also completed its work commitment of $2,000,000 on the Property. Barrick retained a 1% NSR royalty interest on the Property and may exercise a back-in right to purchase a 51% interest in the Property, should Skeena delineate more than 2 million ounces of gold, in return for a payment of three times Skeena’s cumulative expenditures, following which the parties would form a joint venture.
Skeena posted security with the British Columbia Ministry of Energy and Mines to facilitate the transfer of ownership. Summer 2017 exploration plans at Snip will include approximately 10,000 metres of underground drilling (see news release dated March 6, 2017).
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