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Barrick (GOLD) Wraps Up Transaction for Eskay Creek Project

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Barrick Gold Corporation (GOLD - Free Report) stated that it has wrapped the earlier-announced deal with Skeena Resources Ltd. Pursuant to the transaction, Skeena exercised its option to acquire the Eskay Creek project and Barrick waived its back-in right on the project. The move is in line with Barrick’s strategy of focusing with Tier One assets.

The consideration for the transaction consisted of the issuance of 22,500,000 units by Skeena. Each unit issued comprised one common share of Skeena and one-half of a warrant. Each full warrant entitles Barrick to acquire one additional common share of Skeena at an exercise price of C$2.70 each, until the second anniversary of the closing date. The transaction also included a grant of 1% net smelter return (NSR) royalty on the entire Eskay Creek land package and a contingent payment of C$15 million, which is payable in a two-year period post deal closure.

Barrick now holds 24,075,000 Skeena common shares that represent around 12.4% of Skeena’s issued and outstanding common shares on non-diluted basis. Based on the assumption that all of the warrants are exercised in full pursuant to the transaction, Barrick will hold around 17.2% of Skeena’s issued and outstanding common shares.  

Barrick’s shares have surged 61% in the past year compared with the industry’s 47% rally.

Zacks Rank & Key Picks

Barrick currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Brenntag AG (BNTGY - Free Report) , Pretium Resources, Inc. and Yamana Gold Inc. , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Brenntag has an expected earnings growth rate of 2.9% for 2020. The company’s shares have surged 37.3% in the past year.

Pretium Resources has an expected earnings growth rate of 20% for 2020. Its shares have returned 8.5% in the past year.

Yamana has an expected earnings growth rate of 84.6% for 2020. The company’s shares have gained 75.1% in the past year.

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