Skeena raises C$30.4 million from Barrick
Global gold miner exercises warrants, sells all Skeena shares North of 60 Mining News – March 25, 2022
Last updated 3/24/2022 at 2:12pm
Skeena Resources Ltd. March 24 announced that it has received an extra C$30.4 million from the exercise of 2.8 million warrants held by Barrick Gold Corp. at C$10.80 per share. Skeena plans to use this new infusion of cash to help fund the 60,000-meter drill program it has slated for this year at the Eskay Creek gold-silver project in British Columbia's Golden Triangle.
The warrants were issued as part of Skeena's 2020 deal to acquire full ownership of Eskay Creek from Barrick, which produced 3.3 million oz of gold and 160 million oz of silver from ore averaging 45 g/t gold and 2,224 g/t silver during 14 years of underground mining on the property that ended in 2008.
At the same time as exercising the warrants, Barrick sold 8.8 million Skeena shares to an unnamed investment dealer for C$132.5 million, which comes to C$15 per share. This sale includes all the Skeena shares owned by Barrick following its exercise of warrants. The sale, which closed on March 23, represented roughly 12.9% of the issued and outstanding common shares of Skeena.
Skeena's share price on March 24 opened at C$15.75 per share.
Since optioning Eskay Creek from Barrick, Skeena has built a near-surface resource that supported its idea of developing an open pit mine at this precious metal-rich volcanogenic massive sulfide project.
According to a calculation completed about a year ago, Eskay Creek hosts 37.65 million metric tons of open pit minable measured and indicated resources averaging 4.2 grams per metric ton (3.76 million ounces) gold and 82.8 g/t (100.3 million oz) silver; plus 5.24 million metric tons of open pit inferred resource averaging 1 g/t (174,000 oz) gold and 25 g/t (4.2 million oz) silver.
This resource serves as the basis for a PFS that details an open pit mine at Eskay Creek that would produce 2.45 million oz of gold and 79.9 million oz of silver over a ten-year span from 26.4 million metric tons of proven and probable reserves averaging 3.37 g/t gold and 94 g/t silver.
Skeena plans to use the C$30.4 million it raised from Barrick to fund its planned 2022 drill program focused on supplementing the existing mine plan with additional near-surface mineralization amenable to open pit mining methods and will be paralleled by exploratory drilling to test extensions north of the former Eskay Creek mine.
The company also plans to carry out expansion and delineation drilling at the new 21A West Zone as well as the recently discovered 23 Zone.
Earlier this month, Skeena announced the discovery of 21A West Zone, which lies only 60 meters west of the 21A Zone resource included in the current resource.
Highlights from 2021 drilling in this resource expansion zone include:
• 14.5 meters averaging 1.29 g/t gold and 36 g/t silver from a depth of 106.5 meters in hole SK-21-972.
• 11.7 meters averaging 1.77 g/t gold and 200 g/t silver from a depth of 43.5 meters in hole SK-21-983.
• 34 meters averaging 8.78 g/t gold and 13 g/t silver from a depth of 44 meters in hole SK-21-997.
"Due to a lack of drilling, this new discovery which expands the 21A Zone to the west, was considered waste rock in the currently proposed PFS reserve pit area," said Skeena Resources Vice President of Exploration and Resource Development Paul Geddes. "We will work to expand and infill drill the 21A West Zone and potentially bolster the pit-constrained resources surrounding this newly discovered mineralization."
Located immediately southwest of the Eskay Creek open pit considered in the PFS, 23 Zone was also discovered during 2021 drilling.
Highlights from 23 Zone holes reported in January include:
• 90 meters averaging 0.99 g/t gold and 6.5 g/t silver from a depth of 22 meters in hole SK-21-945.
• 43.4 meters averaging 1.3 g/t and 31.4 g/t silver from a depth of 29 meters in hole SK-21-946.
• 59.9 meters averaging 2.14 g/t gold and 14.6 g/t silver from a depth of 44.6 meters in hole SK-21-947.
• 40.5 meters averaging 1.97 g/t gold and 3 g/t silver from a depth of 72 meters in hole SK-21-971.
Skeena plans to kick off its fully funded 2022 resource expansion, delineation, and exploration drilling with a skid-based program that is set to get underway in April, followed by a helicopter-supported drill program consisting of eight diamond drill rigs in June.