Business
Eskay Mining Proceeds With LOI With Silver Standard to Option Up to 60% Interest In Part of SIB Property
TORONTO, ONTARIO--(Marketwired - Feb. 13, 2017) - Eskay Mining Corp. ("Eskay" or the "Company") (TSX VENTURE:ESK) wishes to announce that, further to its Press
About this update from Eskay Mining Corp
[{"type":"text","content":"TORONTO, ONTARIO--(Marketwired - Feb. 13, 2017) - Eskay Mining Corp. (\"Eskay\" or the \"Company\") (TSX VENTURE:ESK) wishes to announce that, further to its Press Release dated January 26, 2017, St Andrew Goldfields Limited (\"St Andrew\"), a wholly-owned subsidiary of Kirkland Lake Gold Ltd., which holds a 20% undivided interest the SIB Property, has waived its right of first refusal and Eskay will proceed to negotiate the terms of a formal agreement for the option (the \"Option\") of up to a 60% undivided interest in part of the SIB Property to Silver Standard Resources Inc. (the \"Optionee\"), the senior mining company referred to in the Janaury 26, 2017 Press Release. The part of the SIB Property subject to the Option consists of 30 mining claims representing approximately 4823 ha or approximately 10% of the SIB Property land package (the \"Optioned Property\"). Eskay holds an 80% undivided interest in the SIB Property pursuant to a joint venture agreement (the \"JVAgr\") with St Andrew. The remainder of the SIB Property will remain subject to the terms of the JVAgr between Eskay and St Andrew. The Optionee can earn a 51% undivided interest in the Optioned Property by completing a $300,000 private placement into Eskay at $0.20 per share, subject to the rules of the TSX Venture Exchange (\"TSXV\"), and expending $11.7 million on the Optioned Property over three years ($3.7 million in the first year and $4 million in each of the second and third years of the Option). In the event that the price of gold does not meet certain thresholds in any option year, the Optionee has the right to reduce minimum expenditures to $2 million in such option year and the term of the Option will be extended for a further year, subject to the requirement by the Optionee to spend at least $10 million in the first three years of the Option (in accordance with the terms of the JVAgr). Once a 51% undivided interest is earned, the Optionee can either proceed to form a joint venture (with the Optionee holding 51%, Eskay holding 29% and St Andrew holding 20% (assuming they contribute their pro rata share of expenditures on the Optioned Property)) or exercise a second option to earn a further 9% undivided interest in the Optioned Property for an aggregate 60% undivided interest (with the Optionee holding 60%, Eskay holding 20% and St Andrew holding 20% (...