The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
To grow Northern BC land position by 700% via QuestEx buyout North of 60 Mining News – April 1, 2022
A sample from a malachite-stained quartz magnetite vein outcropping at KSP, one of nine properties Skeena will own upon completion of its proposed acquisition of QuestEx.
Skeena Resources Ltd. March 30 announced plans to increase its landholdings in British Columbia's Golden Triangle by roughly sevenfold through the acquisition of QuestEx Gold & Copper Ltd., an exploration company that holds one of the largest land positions for mining in this region.
QuestEx' 84,889-hectare (209,700 acres) land position is encompassed by nine projects in the Golden Triangle – KSP, Kingpin, Hit, Sofia, Heart Peaks, Castle, Moat, Coyote, and North ROK.
Under an agreement between the companies, Skeena will pay C$48.6 million in cash and shares to acquire full ownership of QuestEx. In a parallel deal, Skeena will sell the Heart Peaks, Castle, Moat, Coyote, and North ROK properties to Newmont Corp. for approximately C$27 million in cash.
"We are excited to announce these transactions, which will add over 74,000 hectares to Skeena's land holdings and give us one of the largest land positions held for mining in the prolific Golden Triangle," said Skeena Resources President and CEO Walter Coles.
To buy the Golden Triangle-focused exploration company, Skeena has agreed pay C65 cents in cash and issued 0.0367 shares for each outstanding QuestEx share, which equates to about C$1.20 per QuestEx share.
QuestEx says this deal, which is approximately 50% higher than the roughly C80 cents per share price leading up to the agreement, provides shareholders both cash and ongoing exposure to Golden Triangle exploration through ownership in Skeena.
"The transaction is at a significant premium to our recent share price and a positive outcome for our company's shareholders. We appreciate the support of our shareholders, the QuestEx team, our board and advisors," said QuestEx Gold & Copper CEO Joe Mullin. "We also want to thank the First Nations on whose traditional territory we have worked on and been guests, in particular the Tahltan First Nation."
With the cash portion of the deal being covered by the roughly C$27 million received from the sale of some of the properties to Newmont, Skeena will be able to acquire QuestEx and the rest of its properties for only about C$15 million in shares, which represents only about a 2% dilution to its current shareholders.
"Involving Newmont on these transactions has allowed Skeena to acquire these strategically important land packages while minimizing share dilution," said Coles.
Further details on Newmont's plans to acquire these properties and subsequently transfer two over to the Tahltan Nation for land use planning purposes can be read at Newmont to acquire land for Tahltan use in the current edition of North of 60 Mining News.
Skeena is particularly excited about adding the KSP and Kingpin properties to its portfolio. Combined, these two properties cover approximately 640 square kilometers (247 square miles) of copper and gold prospective land across a roughly 58-kilometer- (36 miles) long stretch of the Golden Triangle that is west of its Eskay Creek and southeast of Snip properties.
"The KSP and Kingpin properties are proximal to our Eskay Creek and Snip projects and appear to have the same geological hallmarks that have hosted other large gold systems in the area," said Coles. "We are excited to explore these new mineral claims as we continue to advance Eskay Creek."
The acquisition will require the approval of at least 66.67% QuestEx shareholder approval. Subject to QuestEx shareholder regulatory approvals, along with the fulfillment of other customary closing conditions, Skeena expects to close the QuestEx and Newmont transactions on June 2.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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