- Seabridge Gold (SEA) and Eskay Mining (ESK) enter into a cost-sharing agreement for the construction of the Coulter Creek access road
- Construction is scheduled to begin in July
- Approximately 2.92 kilometres of the First Segment of the CCAR is situated on mineral tenures held by Eskay Mining
- At any time up to one year from the closing of the transaction, Eskay Mining has the sole right to redeem any portion of the CD, plus any unpaid and accrued interest, for cash
- Eskay Mining is responsible to pay any amounts for its portion of the road which exceed the debenture proceeds and will be repaid for any amounts remaining after completion
- Seabridge Gold (SEA) is up 0.69 per cent and is trading at C$21.94 at 2:47 pm ET
Seabridge Gold (SEA) and Eskay Mining (ESK) will share the construction cost of the first phase of the Coulter Creek access road.
Construction is scheduled to begin in July.
Eskay Mining’s share of the costs will be financed by Seabridge as set out below.
The Coulter Creek access road (CCAR) is one of two main access roads planned and permitted for Seabridge’s 100 per cent owned KSM project situated within the Golden Triangle in British Columbia.
The road is designed to connect the KSM project with the existing Eskay mine road to the northwest. Approximately 2.92 kilometres of the First Segment of the CCAR is situated on mineral tenures held by Eskay Mining.
Eskay Mining’s President and CEO, Mac Balkam stated,
“The construction of the First Segment of the CCAR will provide cost-saving logistical benefits for Eskay Mining’s planned exploration activities.”
“This summer, Eskay Mining plans to drill at least 30,000 metres of the diamond core at multiple targets across its 526 square kilometres of land holdings commencing with focussed drilling at its Jeff and TV targets to follow up on encouraging gold-silver mineralization, some high-grade, encountered by 18 of 20 holes completed in 2020,” added Balkam.
To fund Eskay Mining’s share of the cost-sharing agreement, Seabridge has agreed to purchase a $6.0 million convertible debenture (CD) and 1,350,000 warrants from Eskay Mining.
At any time up to one year from the closing of the transaction, Eskay Mining has the sole right to redeem any portion of the CD, plus any unpaid and accrued interest, for cash.
At any time after the first anniversary of closing, Seabridge has the right to convert all or any portion of the principal amount into Eskay Mining common shares at a price of C$2.81 per share.
The CD will mature on the third anniversary of closing and will bear interest at 3 per cent per annum.
At any time after the first anniversary of closing, Eskay Mining has the right to force conversion of the debenture into Eskay Mining common shares at C$2.81 per share provided that Eskay Mining’s common shares close at a price equal to or greater than $4.22 for 20 consecutive trading days.
The warrants are exercisable into Eskay Mining common shares for 3 years at an exercise price of $2.82 per share in the first year, $2.92 in the second year and $3.02 in year three.
The C$6.0 million Seabridge paid for the CD will be held in a segregated account and used to meet cash calls by Eskay Mining payable to the contractors retained to complete the construction of the first segment of the CCAR and to fund Eskay Mining’s share of costs associated with the construction.
Eskay Mining is responsible to pay any amounts for its portion of the road which exceed the debenture proceeds and will be repaid for any amounts remaining after completion of the first segment of the CCAR.
Seabridge holds a 100 per cent interest in several North American gold projects.
Seabridge’s assets include the KSM and Iskut projects located near Stewart, British Columbia, Canada, the Courageous Lake project located in Canada’s Northwest Territories, the Snowstorm project in the Getchell Gold Belt of Northern Nevada and the 3 Aces project located in the Yukon Territory.
Seabridge Gold (SEA) is up 0.69 per cent and is trading at C$21.94 at 2:47 pm ET.
