Canadian mining exploration company Skeena Resources has announced that it will exercise its option to acquire 100% of the Eskay Creek gold-silver project in the Golden Triangle of northwest British Columbia, Canada.

Discovered in 1988, the former Eskay Creek mine produced nearly 3.3 million ounces of gold and 160 million ounces of silver.

The firm has signed a binding term sheet with gold mining company Barrick Gold, a wholly owned subsidiary of Barrick Gold Corporation, for the acquisition of the project.

Under this binding agreement, the two companies have agreed to amend the terms of the original option agreement. Besides, Barrick has agreed to waive its back-in right on the project.

The transaction is expected to enable Barrick to become a significant shareholder in Skeena. After closing, Barrick will own nearly 12.4% of Skeena’s shares outstanding, including existing shares held.

The deal is expected to close in the fourth quarter of the year

Skeena CEO Walter Coles said: “The recent improvements to infrastructure in the Golden Triangle offer us an opportunity to potentially reopen closed mines and contribute to the economic development of communities in northern Canada.

“Gaining 100% ownership and operatorship of Eskay Creek is an important milestone in the evolution of our Company.

“Skeena is well financed with almost C$50 million of cash and we continue to believe there are meaningful opportunities to increase the grade and size of this project with aggressive exploration drilling.”

Closing of the deal is estimated to occur in the fourth quarter of the year, with the binding term sheet is subject to a definitive agreement being entered into within 30 days.

Furthermore, the transaction is subject to customary conditions that include certain government approvals and the approval of the TSX Venture Exchange.

In 2018, Skeena Resources announced the commencement of surface drilling at the Eskay Creek Gold-Silver Project.