TSX-V-listed Skeena Resources will exercise its option to acquire the Eskay Creek gold/silver project, in the Golden Triangle of north-west British Columbia, from gold major Barrick Gold.

Barrick has also agreed to waive its back-in right on Eskay Creek.

As a result of the transaction, Barrick will be a significant shareholder in Skeena, owning about 12.4%. If Barrick were to exercise the warrants, its ownership of Skeena would increase to 17.2% on a partially diluted basis and Skeena would receive cash proceeds of C$30.4-million.

"Skeena is honoured to have Barrick as a significant shareholder as we endeavour to revitalise Eskay Creek, the former highest-grade, past-producing gold mine in the world,” said Skeena CEO Walter Coles in a statement on Monday.

He added that the recent improvements to infrastructure in the Golden Triangle offered Skeena 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."

Under a binding agreement, Skeena and Barrick have agreed to amend the terms of the original option agreement. Skeena will now acquire a 100% ownership interest in Eskay Creek in consideration for the issuance to Barrick of 22.5-million units, with each unit comprising one common share of Skeena and a non-transferrable half warrant. Skeena will also grant a 1% net-smelter royalty on the entire Eskay Creek land package. Half of that royalty may be repurchased from Barrick during the 24-month period after closing, at a cost of C$17.5-million.

There is also a contingent payment, payable if Skeena sells more than a 50% interest in Eskay Creek during the 24-month period after closing, of C$15-million.

Barrick president and CEO Mark Bristow said in a statement that following the merger with Randgold and the creation of Nevada Gold Mines, which intensified its focus on tier-one and strategic assets, the group had continued to look for ways to bring its other assets to account.