Skeena Resources takes over remaining stakes of Eskay Creek Project

Skeena Resources Ltd. \[SKE-TSXV; SKREF-OTCQX; RXFB-FSE\] said Monday, October 5, that it now owns 100% of the Eskay Creek gold-silver project in the Golden Triangle region of northwest British Columbia, following a previously announced transaction with Barrick Gold Corp. (ABX-TSX, GOLD-NYSE) HAS BEEN COMPLETED. As part of the transaction, Skeena issued 22.5 million common shares to Barrick, as well as warrants that entitle the gold mining giant to purchase an additional 11.25 million shares in Skeena. Barrick currently holds over 24 million shares of Junior, or 12.4%. But assuming the warrants are exercised, Barrick's stake would rise to 35.3 million common shares, or 17.2%. Barrick takes a 1% NSR royalty on the entire Eskay Creek land package. The Major will also receive a contingent payment of $ 15 million payable within 24 months of the closing of the transaction. In Monday's press release, Barrick said his decision to forego his back-in right at Eskay Creek is in line with the strategy of focusing on tier 1 assets. Skeena stock got on the news, rising 1.1% or $ 0.03 to $ 2.67 with easy trading. Its shares currently trade on a 52-week range between $ 3.34 and 41 cents. "Upon completion, Skeena will become 100% owned and operated by Eskay Creek, which we aim to revive as a gold-silver open pit mine," said Skeena CEO Walter Coles Jr. Skeena seeks to revitalize two of Canada's most successful high-grade precious metal mines - Snip and Eskay Creek, both in the Golden Triangle. Eskay Creek produced 3.3 million ounces of gold and 160 million ounces of silver from 2.2 million tons of ore from 1994 to 2008, when it was closed. Snip was also a high grade mine that produced approximately one million ounces of gold from 1991 to 1999, with an average gold grade of 25 grams per ton with a 12 grams per ton cut reserve. Eskay Creek was one of the highest grade gold mines in the world at the time it was in production. It was also the fifth highest silver producer in the world. The decision to stop mining at Eskay Creek was made in 2005-2006 when the price of gold was around $ 500 an ounce, the company said. In December 2017, Skeena secured an option to acquire a 100% interest in the Eskay Creek property, which has excellent infrastructure, including all-weather road access and proximity to the new 287 kilovolt northwest transmission line. A PEA released in November 2019 shows that Eskay Creek still has a bright future. Eskay Creek has been revitalized as an open pit gold and silver mine and offers additional underground mining opportunities, the company said. According to the PEA, the project has the potential to produce an average of 306,000 ounces of gold equivalent per year at a diluted mill feed grade of 4.17 grams per tonne of gold equivalent. The processing capacity of 6,850 tons / day will result in a production life of 8.6 years. A further 1.5 years of preliminary separation, storage and development of the mine access are planned before the processing plant is fully operational in the first year. Other PEA highlights include a pre-production capital expenditure of $ 233 million and a total mine life cost of $ 757 per ounce of gold equivalent recovered. The PEA is based on an updated resource estimate that was announced on February 28, 2019. The estimated indicated resource in the pit is 2.46 million ounces of gold equivalent within 12.7 million tons at an average gold equivalent grade of 6.0 g / t. The PEA is based on an updated resource estimate that was announced on February 28, 2019. In addition, there is an in-pit limited Inferred Resource of 1.23 million ounces gold equivalent within 13.6 million tonnes with an average gold equivalent grade of 2.8 g / t.