- Barrick Gold (ABX) has agreed to sell the Eskay Creek gold project to TSXV-listed Skeena Resources (SKE)
- Skeena has retained the rights to wholly-acquire of the Eskay Creek project for some time and released its Preliminary Economic Assessment for the project in November last year
- The deal requires Skeena to pay C$15 million to Barrick and issuing 22.5 million units, consisting of one common share and half a share warrant
- As a result, Barrick will increase its holding in Skeena to 17.2 per cent
- Barrick Gold (ABX) is up 1.6 per cent and is trading at $39.36 per share
Barrick Gold (ABX) has agreed to sell the Eskay Creek gold project to TSXV-listed Skeena Resources (SKE).
Skeena has retained the rights to wholly-acquire of the Eskay Creek project for some time and released its Preliminary Economic Assessment for the project in November last year.
Eskay Creek was once the world's highest-grade gold mine but has not produced gold since 2008.
The company's agreed to exchange the property for 22.5 million units in Skeena.
Each unit consists of a common share and a warrant for a further share and each warrant will give Barrick the chance to acquire a further share at a price of C$2.70 per share.
Skeena will also need to pay Barrick $15 million within the 24-month period following the deal closing. Barrick will also retain a one per cent smelter royalty from any gold mined from the Eskay Creek land package.
Barrick already owns 1.57 million shares in Skeena Resources. Once the transaction is completed, Barrick will have increased its stake in Skeena to 17.2 per cent, assuming it exercises all of its warrants
Barrick expects the transaction to close in the fourth quarter of this year, pending government and exchange approvals.
Speaking on the deal, Skeena's CEO Walter Coles said Eskay Creek was a remarkable discovery that then became an extraordinary underground in mine.
“Skeena is honoured to have Barrick as a significant shareholder as we endeavor to revitalize Eskay Creek, the former highest-grade, past-producing gold mine in the world.
“Gaining 100 per cent ownership and operatorship of Eskay Creek is an important milestone in the evolution of our Company. We continue to believe there are meaningful opportunities to increase the grade and size of this project with aggressive exploration drilling,” he said.
Barrick Gold (ABX) is up 1.6 per cent and is trading at $39.35 per share at 1:45 pm EDT.