Skeena Resources has signed an option agreement to wholly acquire Barrick Gold’s Eskay Creek property located in the Golden Triangle of north-west British Columbia, Canada.

The agreement will also see a strategic investment from Barrick Gold into the company.

Under the agreement, the company needs to incur C$3.5m towards exploration expenditures on the property before 18 December 2020 in exchange for the 100% interest in the property. Approximately C$1.5m of the agreed amount must be incurred by 18 December 2019.

The agreement also requires Skeena to make a payment of C$10m to Barrick, subject to meeting exploration requirements, receipt of all regulatory approvals, as well as all permit transfers and underlying agreement consents.

Skeena Resources CEO Walter Coles Jr said: “Eskay Creek was a remarkable discovery that became an extraordinary mine. It produced 3.3 million ounces of gold and 160 million ounces of silver from 2.2 million tonnes of ore from 1994 until closure in 2008.

“It produced 3.3 million ounces of gold and 160 million ounces of silver from 2.2 million tonnes of ore from 1994 until closure in 2008.”

“We are honoured that Barrick has given us an opportunity to investigate and potentially revitalise one of Canada’s highest-grade past-producing mines.”

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Under the deal, the company will have to reimburse Barrick for reclamation expenditures incurred during the option period.

Meanwhile, Barrick has been granted the right to retain a 1% net smelter return (NSR) on all parts of the property that are not already subject to royalties.

In addition, Barrick has the option to regain a 51% interest in the property through a back-in right.

The company can exercise the right for a 12-month period following notification by Skeena of an NI 43-101 resource of at least 1.5 million ounces of contained gold, or equivalent.

With regards to the strategic investment, Skeena will offer approximately 1,250,000 in common shares to raise gross proceeds of C$1m, subject to approval by the TSX Venture Exchange.