Skeena Announces Acquisition of QuestEx Gold & Copper Ltd. and Concurrent Sale of QuestEx Assets to Newmont Corporation
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Skeena Announces Acquisition of QuestEx Gold & Copper Ltd. and
Concurrent Sale of QuestEx Assets to Newmont Corporation
Vancouver, BC (March 30, 2022) Skeena Resources Limited (TSX: SKE, NYSE: SKE) (“Skeena”
or “the Company”) is pleased to announce that it has signed a binding agreement with QuestEx Gold
& Copper Ltd. (“QuestEx”) whereby Skeena will acquire all of the issued and outstanding shares of
QuestEx, pursuant to a plan of arrangement (the “QuestEx Transaction”) for sh are and cash
consideration. The consideration will consist of C$0.65 cash and 0.0367 of a common share in the
capital of Skeena (each whole share, a “Skeena Share”) for each one QuestEx common share (the
“Arrangement Consideration”), representing total con sideration of approximately C$48.6 million, or
approximately C$1.20 per QuestEx share based on Skeena’s 5 -day VWAP ending March 29, 2022 ,
on the TSX.
Skeena has signed a concurrent binding agreement with Newmont Corporation (NYSE: NEM, TSX:
NGT) (“Newmont”) to vend certain QuestEx properties to Newmont via an asset purchase agreement
(the “Newmont Transaction”) on completion of the QuestEx Transaction for approximately C$27
million. The cash proceeds from the Newmont Transaction are expected to be sufficient to cover the
cash portion of the aggregate Arrangement Consideration payable by Skeena. The net Arrangement
Consideration (after subtracting the QEX shares already owned by Skeena and Newmont) will be
payable through the issuance of approximately C$ 15 million in Skeena Shares. Skeena will also
assume QuestEx’s outstanding options and warrants.
Benefits to Skeena:
• Expansive Land Package in BC’s Prolific Golden Triangle: Following the closing of the
QuestEx Transaction and the Newmont Transacti on, Skeena’s land package will increase
nearly sevenfold, and the Company will (based on publicly available information) have one of
the largest land positions held for mining in British Columbia’s Golden Triangle, totalling 84,889
hectares.
• Exploration Synergies and Potential: The proximity of QuestEx’s KSP and Kingpin properties
to Skeena’s Eskay Creek and Snip projects provides opportunities for exploration synergies.
The Company believes that the combined portfolio offers significant exploration potential (refer
to map at the end of this release).
• Minimal Dilution to Skeena Shareholders: The combination of cash and shares minimizes
dilution to Skeena shareholders to less than 2%, while the cash component is expected to be
entirely offset by the proceeds of the Newmont Transaction.
Walter Coles, President & CEO of Skeena commented, “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. 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. Involving Newmont on these transactions has
NR: 22-07 | March 30, 2022
allowed Skeena to acquire these strategically important land packages while minimizing share dilution.
We are excited to explore these new mineral claims as we continue to advance Eskay Creek.”
Transaction Details
QuestEx Transaction
Under the terms of the binding agreement dated March 29, 2022, between Skeena and QuestEx (the
“Arrangement Agreement”), each of QuestEx’s issued and outstanding common shares will be
exchanged for C$0.65 cash and 0.0367 of a Skeena Share, representing total consideration of
approximately C$1.20 per Que stEx share based on Skeena’s 5 -day VWAP ending March 29, 2022 ,
on the TSX.
Pursuant to the Arrangement Agreement, the QuestEx Acquisition will be carried out by way of a court
approved plan of arrangement and will require the approval of at least 66 2/3% of the votes cast by
(a) shareholders of QuestEx, voting as a single class and (b) shareholders, option holders and certain
warrant holders of QuestEx, voting as a single class, in each case that are present in person or by
proxy at a special meeting expected to be held in May of 2022 (the “QuestEx Meeting”) and, pursuant
to Multilateral Instrument 61-101 – Protection of Minority Securityholders in Special Transactions (“MI
61-101”), a simple majority of the votes cast by shareholders of QuestEx present in person or by proxy
after excluding any votes of “related parties” and “interested parties’ and other persons required to be
excluded under 61 -101 (including Skeena and Newmont) , all at a special meeting to consider the
Transaction. The Arrangement Agreemen t includes customary deal -protection provisions, including
non-solicitation provisions, a right to match in the event of a superior proposal and a termination fee
or expense reimbursement payable under certain circumstances (and which is subject to a shari ng
arrangement with Newmont). Full details of the QuestEx Acquisition will be included in the
management information circular of QuestEx to be mailed in respect of the QuestEx Meeting.
Completion of the QuestEx Transaction is subject to the fulfillment of each of the conditions precedent
to the Newmont Transaction that are capable of being fulfilled prior to the closing of the QuestEx
Transaction.
The Board of Directors of each of Skeena and QuestEx have unanimously approved the Arrangement
Agreement. Cert ain significant shareholders of QuestEx and the directors and senior officers of
QuestEx (together, the “Supporting Shareholders”) have entered into voting support agreements
pursuant to which each has agreed to vote all of their QuestEx securities in favo ur of the QuestEx
Acquisition. Collectively, the Supporting Shareholders own approximately 27% of the outstanding
common shares of QuestEx.
Newmont Transaction
Skeena and Newmont have entered into a binding asset purchase agreement dated March 29, 2022,
pursuant to which Newmont will purchase 100% of Skeena’s rights, titles, and interests, on completion
of the QuestEx Transaction, in and to the Heart Peaks, Castle, Moat, Coyote, and North ROK
properties, currently owned by QuestEx, in exchange for c ash consideration of approximately C$27
million. The consideration payable to Skeena pursuant to the Newmont Transaction will be set off
against the Arrangement Consideration payable and issuable to Newmont pursuant to the QuestEx
Transaction, with the remaining amount payable by Newmont under the Newmont Transaction being
sufficient to cover the cash portion of the aggregate Arrangement Consideration payable pursuant to
the QuestEx Transaction.
Completion of the Newmont Transaction is subject to completion of the QuestEx Transaction.
Closing
Subject to QuestEx shareholder approval, regulatory approval (including TSXV and TSX) and the
fulfillment of other customary closing conditions, the Company expects to close the QuestEx
Transaction and Newmont Transaction on or about June 2, 2022.
Advisors and Counsel
Agentis Capital Mining Partners is acting as financial advisor to Skeena with regard to both the
QuestEx and Newmont Transactions. Blake, Cassels & Graydon LLP is acting as legal counsel to
Skeena.
About Skeena
Skeena Resources Limited is a Canadian mining e xploration and development company focused on
revitalizing the past-producing Eskay Creek gold-silver mine located in Tahltan Territory in the Golden
Triangle of northwest British Columbia, Canada. The Company released a Prefeasibility Study for
Eskay Creek in July 2021 which highlights an open -pit average grade of 4.57 g/t AuEq, an after -tax
NPV5% of C$1.4B, 56% IRR, and a 1.4 -year payback at US$1,550/oz Au. Skeena is currently
completing both infill and exploration drilling to advance Eskay Creek to a full Feasibility Study in 2022.
On behalf of the Board of Directors of Skeena Resources Limited,
Walter Coles Jr.
President & CEO
Contact Information
Investor Inquiries: [email protected]
Office Phone: +1 604 684 8725
Company Website: www.skeenaresources.com
The scientific and technical information in this press release was approved by Paul Geddes, P.Geo.,
a Qualified person as defined under National Instrument 43-101 and Vice President, Exploration and
Resource Development for the Company.
Cautionary note regarding forward-looking statements
Certain statements made and information contained herein may constitute “forward looking information” and “forward
looking statements” within the meaning of applicable Canadian and United States securities legislation. These statements
and information are based on facts currently available to the Company and there is no assurance that actual results will
meet management’s expectations. Forward -looking statements and information may be identified by such terms as
“anticipates”, “believes”, “targets”, “estimates”, “plans”, “expects”, “may”, “will”, “could” or “would” and, in this press release,
include, without limitation: statements regarding the QuestEx Transaction and Newmont Transaction, including the closing
thereof and the timing and receipt of approvals and fulfillment of the conditions therefor, and the source of reimbursement
for the cash portion of the Arrangement Consideration; the expected synergies arising from the QuestEx Transaction; and
the exploration potential and geological hallmarks of the QuestEx properties to be retained by Skeena. Forward -looking
statements and information contained herein are based on certain factors and assumptions regarding, among other things,
the closing of the QuestEx Transaction and the Newmont Transaction, including the receipt of approvals and fulfillment of
the conditions therefor, that the purchase price pursuant to the Newmont Transaction will be sufficient to reimburse Skeena
for the cash portion of the Arrangement Considera tion, that the Company will recognize the expected synergies from its
acquisition of QuestEx, that the Company will be able to realize the exploration potential of the QuestEx properties it
intends to retain, the estimation of mineral resources and reserve s, the realization of resource and reserve estimates,
metal prices, taxation, the estimation, timing and amount of future exploration and development, capital and operating
costs, the receipt of regulatory approvals, environmental risks, title disputes and other matters. Forward -looking
statements are subject to known and unknown risks which may cause actual results to vary significantly from the results
implied by forward -looking statements, including, that the Company may not close the QuestEx Transactio n or the
Newmont Transaction, on the timeline anticipated, or at all; that the purchase price payable pursuant to the Newmont
Transaction may not be sufficient to fund the cash portion of the Arrangement Consideration, and the Company may be
required to utilize funds from treasury to fund the outstanding cash required; that the Company may not be able to realize
upon the expected synergies arising from the completion of the QuestEx Transaction, or the exploration potential of the
QuestEx properties it intends to retain, and the other risks and uncertainties set out in the Company’s most recent annual
information form, which is available on the Company’s SEDAR profile at www.sedar.com. Note that f or acquisition
accounting purposes , the shares issued to acquire QuestEx will be valued at the date of close. While the Company
considers its assumptions to be reasonable as of the date hereof, forward -looking statements and information are not
guarantees of future performance and readers should not place undue importance on such statements as actual events
and results may differ materially from those described herein. The Company does not undertake to update any forward -
looking statements or information except as may be required by applicable securities laws.
Neither TSX nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or
accuracy of this release.
Not for distribution to U.S. Newswire Services or for dissemination in the United States of America. Any failure
to comply with this restriction may constitute a violation of U.S. Securities laws.