Franco-Nevada Corporation ,,Skeena
Vancouver, BC (December 13, 2021) Skeena Resources Limited (TSX: SKE, NYSE: SKE) (“Skeena” or the “Company”) is pleased to announce a structured non-brokered private placement offering (the “Offering”) of 1,471,739 flow-through common shares at a price of C$21.00 per flow-through common share for aggregate gross proceeds of approximately C$30.9 million. Franco-Nevada Corporation (“Franco-Nevada”) will be the end purchaser of the common shares issued in connection with the Offering.
In connection with the Offering, Skeena will grant to Franco-Nevada a right of first refusal (the “ROFR”) over the sale of a 0.5% net smelter return (NSR) royalty (the “Royalty”) over the Eskay Creek gold-silver project (“Eskay Creek”) matching the portion of the existing Barrick royalty that can be bought back by the Company. The ROFR granted to Franco-Nevada will be subject to a competitive auction process conducted by Skeena, in which Franco-Nevada will participate, prior to October 2, 2023. If Skeena has not sold the Royalty to Franco-Nevada or a third party by October 2, 2023, Franco-Nevada will have the right to purchase the Royalty for C$22.5M, for a period of 30 days. In addition, upon closing of the Offering, Skeena and Franco-Nevada will enter into an amendment to the terms of their existing royalty agreement such that it will cover the same tenures as are covered in the existing Barrick royalty agreement.
As noted, Skeena continues to have the right to buy down a 0.5% NSR royalty (from a 1.0% NSR royalty) currently held by Barrick, for a payment of C$17.5M, until October 2, 2022.
Skeena plans to use the net proceeds of the Offering to fund exploration activities on Eskay Creek. The closing of the Offering is anticipated to occur on or before December 23, 2021 (the “Closing Date”) and is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals, including the acceptance of the Toronto Stock Exchange. The securities issued under the Offering will be subject to a statutory hold period in Canada expiring four months and one day from the Closing Date. No finder’s fees will be paid in connection with this Offering.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of Skeena’s securities in the United States. The securities have not been and will not be registered under the U.S. Securities Act or any state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.