Markets

Skeena Resources secures sole access to ‘Eskay Creek’ and MAG Silver raises $ 50 million in the US!

The precious metals have broken out through important technical chart brands. Market experts predict a longer bull market! This eases the situation for precious metal companies, which can now negotiate excellent deals again, such as Skeena Resources and MAG Silver recently.

Bang at Skeena Resources!

Skeena Resources Limited (ISIN: CA83056P8064 / TSX-V: SKE) has negotiated a binding agreement, a so-called term sheet, with a 100% subsidiary of Barrick Gold Corporations, which entitles Skeena to use its option to run the entire gold-silver project ‘Eskay Creek’ in the ‘Golden Triangle’ in Take Northwest British Columbia!

To do this, Skeena Resources only has to transfer 22.5 million units consisting of one Skeena common share and half (non-transferable) warrant to Barrick Gold’s subsidiary. The mining giant is thus waiving its rights to the deposit.

As the exercise price for each entire warrant, the partners agreed on a price of CAD 2.70, which on the signature date corresponded to a surcharge of a good 60% on the 20-day VWAP and a surcharge of 35% on the closing price.

However, the Barrick subsidiary has been granted a 1% ‘NSR’ royalty for the entire land package of ‘Eskay Creek’, which, however, has to be acquired within two years of the transaction at a price of CAD 17.5 million. On top of that, another $ 15 million payment will be made if Skeena sells more than 50% of Eskay Creek within two years of the transaction. Although we don’t believe that Skeena will sell anything!

After the transaction, Barrick will of course indirectly become a significant Skeena shareholder, with approximately 12.4% of the shares outstanding. If you choose to convert the warrants at Barrick Gold and / or the subsidiary, the share will even increase to 17.2% on a partially diluted basis. Due to the high percentage stake in Skeena, the Barrick subsidiary has the right to appoint a director to the Board of Directors of Skeena Resources.

For Skeena Resources, on the other hand, that would of course mean revenues of CAD 30.4 million. As long as Barrick retains its portion of at least 10% on a partially diluted basis, Barrick is granted the right to maintain that portion in future funding rounds.

Such an excellent deal, of course, brings joy to both sides of the company, as was readily apparent from Walter Coles Jr., Skeena’s CEO, and Mark Bristow, Barrick’s President and Chief Executive.

“Skeena is honored to have Barrick as a significant shareholder as we strive to ‘Eskay Creek’ reopen the former gold mine with the highest grades. The recent improvements to the infrastructure in the ‘Golden Triangle’ offer us the opportunity to quickly reopen closed mines in order to contribute to the economic development of the communities in northern Canada. The complete ownership of ‘Eskay Creek’ is an important milestone in the development of our company. We are well funded with nearly $ 50 million in cash and continue to believe that there are significant opportunities to improve the salary and size of this project through aggressive exploration drilling. ”said Walter Coles Jr. of Skeena Resources.

Mark Bristow added:

“The Skeena team did an excellent job developing ‘Eskay Creek’! This is another good example of a transaction that offers everyone involved a value-adding opportunity. ”

With this advantageous agreement, the Canadian mining exploration company, which focuses on the development of the formerly producing gold-silver mine ‘Eskay Creek’, has positioned itself excellently in order to be able to develop its project free of third parties. The potential of the historic mining site is illustrated by the robust preliminary economic assessment published at the end of last year (‘Preliminary Economic Assessment’).

Source: Skeena Resources

Based on these excellent economic figures, Skeena now wants to carry out a feasibility study as quickly as possible through the still necessary infill and exploration drilling. At the same time, the company is also exploring the other previously produced producing gold mine ‘Snip’. Skeena thus has two first-class projects in the best jurisdiction!

MAG Silver issues shares for $ 50 million sold in the US market!

The prospective silver producer active in Mexico MAG Silver Corp. (ISIN: CA55903Q1046 / TSX-V: MAG) on June 29, 2020, led by Raymond James & Associates, in collaboration with Canaccord Genuity, BMO Personal-Financial.com Markets, H.C. Wainwright & Co, Roth Personal-Financial.com Partners and TD Securities signed a sales agreement whereby MAG Silver may, at its discretion, sell up to $ 50 million of common stock of the company over the aforementioned partners for a period of time.

Ordinary shares are sold as defined in the Canadian Securities Administrators National Instrument 44-102-Shelf Distributions through the relevant stock exchanges, including sales that are made directly on NYSE American or on any other recognized marketplace where the common shares are listed or in be traded in the United States.

The sale of common stock under the sales agreement, if any, is through ordinary brokerage on NYSE American at market prices. No offer or sale of common stock in Canada will be made on the Toronto Stock Exchange or any other trading market in Canada under the sales agreement.

MAG Silver intends to use the resulting net income primarily to finance the completion of the mine construction work on the ‘Juanicipio’ project, with the remaining funds then being used to finance further exploration of the project and as working capital and for general corporate purposes.

Best wishes

your

Jörg Schulte

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