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Eskay Mining Corp
Symbol ESK
Shares Issued 183,283,723
Close 2023-06-06 C$ 0.72
Market Cap C$ 131,964,281
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Eskay, Seabridge terminate CCAR cost-sharing agreement

2023-06-07 11:08 ET - News Release

Mr. Mac Balkam reports


Eskay Mining Corp., further to its news release of Nov. 12, 2021, Eskay, Seabridge Gold Inc. and Seabridge's wholly owned subsidiary, KSM Mining ULC, have signed an agreement (the termination and mutual release agreement) to terminate the amended agreement (the amended cost-sharing agreement) whereby Seabridge and Eskay were to finance the costs of construction of the first nine kilometres of the Coulter Creek access road (CCAR), estimated to cost $12.5-million, with a limit on Eskay's contribution to a maximum of $6.25-million. Seabridge provided Eskay with a $3-million revolving loan facility at an interest rate of 3 per cent per year to give Eskay flexibility with financing its share of the costs of construction.

At the end of 2022, the costs incurred in respect of the construction of the first segment of the CCAR were approximately $6-million. Seabridge had suspended delivering cash calls before year-end and Eskay's share of cash calls to year-end was financed through the drawdown of approximately $2.7-million of the loan facility provided by Seabridge, pursuant to the amended cost-sharing agreement. Seabridge completed 3.2 km of the road in 2022 and, due to Seabridge concentrating its current road building activities on its Treaty Creek access road, it is uncertain when Seabridge will complete the first segment of the CCAR.

Eskay will not have access to or use of the first segment of the CCAR for its 2023 exploration program. Therefore, Eskay, Seabridge and KSM agreed to terminate the amended cost-sharing agreement and release each other from all obligations under the amended cost-sharing agreement, including any obligations relating to the completion of the first segment of the CCAR, any obligation of Eskay to contribute to construction costs relating to the first segment of the CCAR, or any obligation of Seabridge to provide further loans or of Eskay to repay loans provided by Seabridge, or interest thereon. In addition, the 500,000 bonus warrants issued to Seabridge were cancelled.

Pursuant to the terms of the termination and mutual release agreement, Eskay will have the right, after completion of the first segment of the CCAR, as long as KSM or its assignee operates the relevant CCAR segment, to request a road use agreement for the use of the first segment of the CCAR. Pursuant to the terms of the road use agreement, Eskay will be required to pay an industry-standard portion of maintenance costs and $100,000 per year for up to eight years (which may be non-consecutive years) for use of the first segment of the CCAR.

About Eskay Mining Corp.

Eskay Mining is a TSX Venture Exchange-listed company, headquartered in Toronto, Ont. Eskay is an exploration company focused on the exploration and development of precious and base metals along the Eskay rift in a highly prolific region of northwest British Columbia known as the Golden Triangle, 70 kilometres northwest of Stewart, B.C. The company currently holds mineral tenures in this area comprising 177 claims (52,600 hectares).

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