Skeena Acquires High-Grade Spectrum Gold Property, Northwest B.C.
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Apr 28, 2014) -
Skeena Resources Limited (TSX-VENTURE:SKE) ("Skeena" or the
"Company") is pleased to announce that it has entered into a
conditional asset purchase agreement dated April 14, 2014 (the
"Asset Purchase Agreement") with Eilat Exploration Ltd. ("Eilat")
and Keewatin Consultants (2002) Inc. ("Keewatin") with respect to
the acquisition (the "Acquisition") of a 100% interest in the
Spectrum gold and copper exploration property ("Spectrum") located
in the "Golden Triangle" of the Stikine Arch in northwest British
Columbia. The 3,580 hectare property is located approximately 37 km
west of Imperial Metals' Red Chris mine and 16 km west-northwest of
the NGEx/Teck GJ deposit. The Spectrum location fits well with the
core competency of the Skeena technical team, which has
demonstrated past exploration successes in northwest B.C. with
their participation in the discoveries of the Snip and Eskay
deposits, both of which were advanced into production.
Prospecting on Spectrum commenced in 1957 with the discovery of
a high-grade vein referred to as the "Hawk Vein". In the 1970's,
work shifted to the porphyry copper-gold targets in the vicinity of
the Central Zone. The most recent and comprehensive program,
1990-92, was directed at exploration of high-grade gold veins,
including 50 diamond drill holes completed by Columbia Gold Mines
(managed by John Brock and Wayne Roberts). An 'inferred',
non-43-101 compliant resource, of 614,000 tonnes grading 12.3 g/t
Au (cut-off grade of 5 g/t Au) containing 243,600 oz. of gold was
estimated by Columbia to a projected depth of approximately 150
metres. These historical estimates are not current and a Qualified
Person has not done sufficient work to classify the historical
estimate and Skeena is not treating the historical estimate as a
current resource estimate.
Ron Netolitzky, Chairman of Skeena, remarked that: "Spectrum is
one of those very rare, high-grade gold occurrences that would
attract any explorationist, even in a challenging, risk-adverse
market. It is a well-known, advanced exploration project in an
excellent geological setting and the historical work was completed
by well-respected professionals who remain active in the industry.
Furthermore, access and the local infrastructure have dramatically
improved over the past decade. The database includes in excess of
100 diamond drill holes (>12,000 metres), extensive prospecting,
geologic mapping, geochemical and geophysical surveys, and an
inferred resource for a shallow portion of the Central Zone." Mr.
Netolitzky further added, "Skeena has been aggressively pursuing
this acquisition for several years and we are excited to have
finally reached an agreement with Eilat for its 80% ownership in
Spectrum." In 2013, Mr. Netolitzky's private company, Keewatin,
acquired a 15% interest in the Spectrum Project and a further 5%
interest in February 2014 for total cash consideration of $1.2
million.
The property contains more than 10 different showings of
high-grade sulphide-gold mineralization, spatially associated with
steeply-dipping fracture zones contained within a broad area of
propyllitic and potassic-altered Stuhini Group intermediate
volcanics and volcaniclastic rocks at the contact zone of a
sill-like monzonite intrusion of Jurassic age. This is the same
type of geological setting as many of the major copper-gold
deposits in the Golden Triangle area of northwest British Columbia
except that Spectrum has demonstrated much higher gold grades.
The Central Zone mineralization consists of 4 sub-parallel
veins, each of which vary from 3 to 10 metres wide, comprising
porphyry intrusive veins, quartz and quartz-carbonate veins, quartz
veinlet stockworks and zones of silicification that appear to have
their origin from solutions coming from porprhyry intrusives. The
Central Zone has been drilled tested for over 600 metres of strike
length to a depth of approximately 150 metres within a larger
altered zone. Mineralization consists of gold-bearing pyrite,
native gold, arsenopyrite, chalcopyrite and sphalerite, and remains
partially open along strike and essentially open down dip.
Throughout the property, there are also numerous scattered
porphyry-style occurrences and geochemical anomalies.
Mineralization is interpreted to be related to porphyry intrusives
and hydrothermal fluids associated with deep set porphyry and or
monzonite intrusions and its characteristics are consistent with
the upper portion of an alkalic porphyry-style copper-gold
deposit.
Skeena's CEO, Walter Coles, commented that, "This summer, Skeena
will undertake a drilling program which we expect will reconfirm
the historic resource and begin to demonstrate our ability to
significantly grow the high- grade gold resources on the
property."
Skeena intends to initially target two shallow areas for
drilling on the Spectrum property. The first target is the possible
on-strike continuation of the Central Zone toward the East Creek
Zone. The north-trending Central Zone is comprised of four
sub-parallel gold-bearing structures that have been tested over a
strike length of 600 metres and appear to have been off-set by the
Central Zone Fault (a NNE-trending fault). The East Creek Zone,
some 1.5 kilometers further to the north of the Central Zone, is a
north-trending, 5 metre-wide silicified zone with gold, pyrite,
arsenopyrite, chalcopyrite and sphalerite, traced at surface for
600m strike length. A trench sample yielded 58.4 g/t Au over 2.6 m.
The East Creek Zone has only been tested with 3 drill holes to
date. Two of those drill holes yielded 1 to 2 g/t over less than 2
m, while the third hole yielded 34.45 g/t over 2.6 metres. Apart
from a single drill hole to the north of the Central Zone Fault,
most of the intervening 1.5 km section between the Central and East
Creek Zones has not been drill tested and provides an attractive
exploration target.
Skeena's secondary target will be copper-gold mineralization of
alkalic, porphyry-style affinity. The Skarn Showing, which yielded
2.9 g/t Au and 0.5% Cu over 20 metres in a trench, and the West
Creek Showing, which yielded a grab sample of 31 g/t Au and 10% Cu,
are both interpreted to be within this class and may be indicative
of the potential for a larger, under-lying porphyry system which
warrants further investigation.
An Archaeological Impact Assessment was undertaken on the
property in September, 2012 in conjunction with Rescan and a
joint-venture company of the Tahltan First Nation, without any
significant archaeological issues being uncovered. Skeena looks
forward to working with the Tahltan First Nation and other local
stakeholders and communities in order to advance a profitable,
financially stable, project that the Company hopes will create
value for its shareholders and lasting economic and social benefits
for the region.
The Company will acquire ownership of the Spectrum property via
the execution of the Asset Purchase Agreement, however, the
Acquisition is conditional on a six-month due diligence program and
obtaining shareholder approval. Closing of the Acquisition, which
is further subject to regulatory review as described below,
including the approval of the TSX Venture Exchange (the
"Exchange"), is anticipated to occur in mid-October 2014. The total
consideration for the 100% interest in Spectrum is 80 million
common shares of the Company (the "Consideration Shares"), of which
64 million Consideration Shares are to be issued to Eilat and 16
million Consideration Shares are to be issued to Keewatin, together
with an interest free note payable to Eilat in the amount of
$700,000 (due September 30, 2015), the right for Eilat to nominate
a member to Skeena's Board of Directors, replacement of existing
environmental bonds, and certain other minor rights and benefits.
The Company will also pay up to $50,000 as a non-refundable deposit
to cover certain near term operating expenses incurred by Eilat.
Skeena's interest in Spectrum will remain subject to a pre-existing
1.75% net smelter return royalty payable to Pacific Ridge
Exploration (formerly Columbia Gold Mines) and other parties. The
closing of the Acquisition is also subject to the Company
completing a financing with net proceeds of at least $2
million.
Skeena anticipates that the Consideration Shares will be
escrowed according to the Exchange's requirements and will be
further subject to a Pooling Agreement that includes a voting trust
over such Consideration Shares, which will be controlled by
Skeena's chairman, Ron Netolitzky. Throughout the pooling period,
Skeena will also have a right-of-first-offer to find a purchaser,
at the prevailing volume weighted average price on the Exchange,
with respect to sales of blocks of Consideration Shares having a
value of more than $250,000.
Eilat and Keewatin are both private companies existing under the
laws of British Columbia. Keewatin is controlled by Ron Netolitzky,
the Chairman of Skeena. The sole director of Eilat is Mr. Jean
Pierre Riffard of Milwaukee Wisconsin, USA. Prior to financing and
based on the outstanding share capital of the Company as of the
date of this news release, the Acquisition would constitute a
reverse take-over of the Company under the policies of the
Exchange. Keewatin, which owns a minority interest in Spectrum, is
a related party of Skeena and, as such, the acquisition will be
subject to Policy 5.9 of the Exchange's Corporate Finance Manual.
Skeena has established a special independent committee of the board
to review and make decisions with respect to the Acquisition.
Completion of the Acquisition is subject to a number of
conditions, including Exchange acceptance and disinterested
shareholder approval. The transaction cannot close until the
required shareholder approval is obtained. There can be no
assurance that the transaction will be completed as proposed or at
all. In the event that management of Skeena decides not to proceed
with the Acquisition, after shareholder approval has been obtained,
Eilat would be entitled to a $700,000 termination fee.
Investors are cautioned that, except as disclosed in the
management information circular to be prepared in connection with
the Acquisition, any information released or received with respect
to the Acquisition may not be accurate or complete and should not
be relied upon. Trading in the securities of Skeena should be
considered highly speculative.
The Exchange has in no way passed upon the merits of the
proposed transaction and has neither approved nor disapproved the
contents of this press release.
The Qualified Person responsible for the technical data in this
news release is the Company's Vice-President, Exploration, Rupert
Allan, P.Geol.
ON BEHALF OF THE BOARD OF DIRECTORS OF SKEENA RESOURCES
LIMITED
Walt Coles Jr., President & CEO
Cautionary
Statement on Forward-Looking Information
Certain
information in this news release is forward-looking within the
meaning of certain securities laws, and is subject to important
risks, uncertainties and assumptions. This forward-looking
information includes, among other things, information with respect
to the satisfying the conditions to the Acquisition (including
receipt of shareholder and regulatory approval and completing the
required financing), the results of the Company's due diligence
investigations, the Company's beliefs, plans, expectations,
anticipations, estimates and intentions, including the continued
listing and trading of the Company's common shares on the TSXV. The
words "may", "could", "should", "would", "suspect", "outlook",
"believe", "anticipate", "estimate", "expect", "intend", "plan",
"target" and similar words and expressions are used to identify
forward-looking information. The forward-looking information in
this news release describes the Company's expectations as of the
date of this news release and accordingly, is subject to change
after such date. Readers should not place undue importance on
forward-looking information and should not rely upon this
information as of any other date. While the Company may elect to,
it does not undertake to update this information at any particular
time.
Neither TSX
Venture Exchange nor the Investment Industry Regulatory
Organization of Canada accepts responsibility for the adequacy or
accuracy of this release.
Skeena Resources LimitedTony PerriInvestor Relations,
Manager(604) 684-8725Skeena Resources LimitedRaju Wani(403)
240-0555(604) 669-2543tperri@skeenaresources.com
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