Garibaldi Resources up 27% on Eskay Mining news
Eskay Mining Corp. [ESK-TSXV; ESKYF-OTCQ;, KN7-FSE] said Friday February 5 that it has agreed to acquire a 19.5% stake in Garibaldi Resources Corp. [GGI-TSXV; GGIFF-OTC]. It said the acquisition is being made for investment purposes.
Eskay is focused on exploration for precious and base metals along the Eskay rift in the Golden Triangle region of northwestern British Columbia approximately 70 km northwest of Stewart.
Its portfolio includes several gold and silver showings to the south and east of its SIB property, (which adjoins a previously mined rich VMS deposit known as the Eskay Creek Mine), including the TV Zone, which is held 80% by Eskay Mining and 20% by Kirkland Lake. Garibaldi Resources has a 100% interest in the E&L Project on Nickel Mountain near Eskay Creek. The E&L Project is the first magmatic nickel-copper-rich massive sulphide system to be discovered in the Golden Triangle.
Interest in Nickel Mountain was triggered in 2017 when drill hole EL-17-14 intersected 8.3% nickel, 4.2% copper, 0.19% cobalt, 1.96 g/t platinum, 4.5 g/t palladium, 1.1 g/t gold, and 11.1 g/t silver over 16.75 metres starting just 100.4 metres downhole, within a broader 40.4-metre core length highlighted by 3.9% nickel and 2.4% copper.
On Friday, Eskay Mining said it has struck a deal with Sprott Foundation to acquire 23.7 million common shares of Garibaldi Resources worth $10.7 million in return for the issuance of 4.21 million working capital units of Eskay at $2.56 per working capital (WC) unit.
Each WC unit consists of one common share of the company and one warrant. Each WC warrant entitles the holder to purchase one share at $2.82 per WC warrant share until the earlier of the date that is two years following closing of the acquisition.
The acquisition represents 19.5% of the current issued and outstanding shares of Garibaldi.
Garibaldi shares advanced on the news, rising 27% or 10.5 cents to 49.5 cents on volume of 987,143. The shares currently trade in a 52-week range of 99 cents and 37 cents.
Eskay shares rose 21 cents or 7.4% to $3.03 on volume of 688,933. The shares previously traded in a 52-week range of $2.90 and 12 cents.