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Mining News August 05, 2020 10:10:05 PM

Barrick Gold Declares Final Deal with Skeena on Eskay Creek Mine Project

Paul Ploumis
ScrapMonster Author
Skeena will grant 1% net smelter return (NSR) royalty on the entire Eskay Creek land package.

Barrick Gold Declares Final Deal with Skeena on Eskay Creek Mine Project

SEATTLE (Scrap Monster): Barrick Gold has reached a definitive agreement with Skeena Resources on acquisition of Eskay Creek mine project in British Columbia. Accordingly, Skeena will exercise an option to acquire 100% stake in the high-grade gold mine. Also, Barrick will waive its back-in right on the project. The deal is expected to close during fourth quarter this year, subject to customary conditions, including certain government as well as exchange approvals.

The agreement specifies a contingent payment of C$15 million, in case Skeena decides to sell more than 50% interest in the project within two years from the closing of the deal. In addition, Skeena will grant 1% net smelter return (NSR) royalty on the entire Eskay Creek land package.

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Barrick Gold announced that it will file an early warning report, in accordance with the applicable securities laws.

Further to closing of the deal, Skeena will have the full rights to operate the mine. Barrick will become a significant shareholder in Skeena, by holding approximately 24 million shares of that company on a pro-forma basis, accounting for nearly 12.4% of the total issued and outstanding common shares.

Upon reaching full operations, the Eskay Creek mine is expected to report annual production of 236,000 ounces of gold and 5.81 million ounces of silver.

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