Skeena Resources Closes Strategic Financing and Option on Snip Project
TSX VENTURE: SKE
VANCOUVER, BC / ACCESSWIRE / October 16, 2018 / Skeena Resources Limited (TSX.V: SKE, OTCQX: SKREF) ("Skeena" or the "Company") is pleased to announce that it has closed the strategic financing and option of 60% of Skeena's Snip Gold Project ("Snip") previously announced on September 19, 2018 with Hochschild Mining Holdings Limited (a wholly owned subsidiary of Hochschild Mining plc) ("Hochschild").
Skeena collected proceeds of C$6,767,398 from the sale of 7,519,331 flow-through common shares of the Company at a price of C$0.90 per share (the "Financing"). Hochschild, who was the end purchaser of the shares via a charity flow through swap, acquired the shares at a price of C$0.74 per share. After giving effect to the Financing, Hochschild now owns approximately 8% of Skeena's total issued and outstanding shares. All the securities issued under the Financing are subject to a hold period of four months and one day from the closing of the Financing.
Hochschild may nominate a representative to serve on Skeena's board of directors for so long as it holds 5% or more of the issued and outstanding shares of Skeena. In addition, Hochschild will have the right to participate in future offerings in order to maintain its percentage interest in Skeena.
Concurrent with the closing of the Financing, Skeena granted Hochschild an option to earn a 60% undivided interest in Snip located in the Golden Triangle of British Columbia (the "Option") by spending twice the amount Skeena has spent since it optioned Snip from Barrick.
Hochschild will have three years to provide notice to Skeena that it wishes to exercise its option. Once exercised, Hochschild shall then have three years (the "Option Period") to:
- incur expenditures on Snip that are no less than twice the amount of such expenditures incurred by Skeena from March 23, 2016 up until the time of exercise of the Option by Hochschild. (As of June 30 2018, Skeena had incurred C$16.9 million of expenditures at Snip);
- incur no less than C$7.5 million in exploration or development expenditures on Snip in each 12-month period of the Option Period; and
- provide 60% of the financial assurance required by governmental authorities for the Snip mining properties.
After completing a minimum spend of C$22,500,000, Hochschild may extend the Option Period by a further period of 12 months by making a cash payment to Skeena of C$1.0 million.
Skeena holds a 100% interest in the past-producing Snip mine. The Snip mine produced approximately one million ounces of gold from 1991 until 1999 at an average gold grade of 27.5 g/t. Skeena is drilling from underground at Snip in preparation for a maiden resource estimate to be released in 2019.
Hochschild is a leading underground precious metals producer focusing on high-grade silver and gold deposits. Listed on the London Stock Exchange and headquartered in Lima, Peru, Hochschild has over 50 years' operating experience in the Americas. Currently Hochschild operates four underground mines, three located in southern Peru and one in southern Argentina. All of Hochschild's underground operations are epithermal vein mines and the principal mining method used is cut and fill. In 2017, Hochschild produced 19.1 million attributable ounces of silver and 255 thousand ounces of gold.
Skeena Resources Limited is a junior Canadian mining exploration company focused on developing prospective precious and base metal properties in the Golden Triangle of northwest British Columbia, Canada. The Company's primary activities are the exploration and development of the past-producing Snip mine and the recently optioned Eskay Creek mine, both acquired from Barrick. In addition, the Company has completed a Preliminary Economic Assessment on the GJ copper-gold porphyry project.
On behalf of the Board of Directors of Skeena Resources Limited,
Walter Coles Jr.
President & CEO
Cautionary note regarding forward-looking statements
Certain statements made and information contained herein may constitute "forward looking information" and "forward looking statements" within the meaning of applicable Canadian and United States securities legislation. These statements and information are based on facts currently available to the Company and there is no assurance that actual results will meet management's expectations. Forward-looking statements and information may be identified by such terms as "anticipates", "believes", "targets", "estimates", "plans", "expects", "may", "will", "could" or "would". Forward-looking statements and information contained herein are based on certain factors and assumptions regarding, among other things, the estimation of mineral resources and reserves, the realization of resource and reserve estimates, metal prices, taxation, the estimation, timing and amount of future exploration and development, capital and operating costs, the availability of financing, the receipt of regulatory approvals, environmental risks, title disputes and other matters. While the Company considers its assumptions to be reasonable as of the date hereof, forward-looking statements and information are not guarantees of future performance and readers should not place undue importance on such statements as actual events and results may differ materially from those described herein. The Company does not undertake to update any forward-looking statements or information except as may be required by applicable securities laws.
Neither TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.