Skeena acquires 13% of TDG Gold through $8m investment, project sale

Skeena Gold & Silver (TSX: SKE) (NYSE: SKE) is acquiring a 13% stake in TDG Gold (TSXV: TDG) through the participation of a private placement and by selling one of its properties in north-central British Columbia.

Under the private placement arranged by TDG, Skeena will acquire 14 million flow-through shares at a price of C$0.825 per share for an investment of C$11.55 million ($8m). The placement also includes 6 million non-flow-through shares priced at C$0.50 issued to other TDG investors, bringing the total proceeds to C$14.55 million ($10.1m).

Shares of TDG Gold traded 1% higher at C$0.46 by midday Monday, with a market capitalization of C$66.2 million ($46m). Its 52-week high was C$0.59, while its lowest was C$0.085.

Additionally, Skeena will sell its 90-sq.-km Sofia property to TDG in exchange for 8 million shares of TDG at a deemed price of $0.50 per share. Acquired by Skeena in 2021, the Sofia project borders TDG’s concessions in the Toodoggone district.

The project is the subject of a nine-hole drill program that intercepted low-grade porphyry-style mineralization, interpreted by Skeena as potentially peripheral to a better mineralized system.

TDG holds mineral claims covering approximately 320 sq. km of the historical Toodoggone production corridor, including the past-producing gold-silver Shasta and Baker mines, which produced intermittently between 1981-2012, and the historical high-grade gold Mets developed prospect.

These projects, according to TDG, are all road accessible and have a combined 65,000 metres of historical drilling.

Proximity to AuRORA

Skeena’s investment, says TDG, would facilitate the early mobilization and exploration to begin its Greater Shasta-Newberry project that lies to the adjacent to the historic Shasta mine and is 6 km southeast of the former-producing Baker mine.

With five drill-ready exploration targets, the company believes Greater Shasta-Newberry, as a newly defined project, holds the greatest potential for the discovery of gold-silver deposits around the Shasta deposit, for which it has estimated an indicated resource of 515,800 oz. of gold-equivalent and inferred resource of 505,500 oz.

TDG also noted that the Shasta-Newberry project is located directly next to the high-grade AuRORA porphyry discovery recently made by Freeport McMoRan (NYSE: FCX) and Amarc Resources (TSXV: AHR).

“The recent announcement of the AuRORA discovery on our boundary represents a paradigm shift for the whole Toodoggone district. Completion of the private placement, including the support of Skeena, advances our plans for a rapid, focused program to explore the potential extensions from AuRORA onto our 100% owned Greater Shasta-Newberry project,” TDG’s CEO Fletcher Morgan said in a news release.

Skeena’s executive chairman Walter Coles added that the investment in TDG highlights the company’s “agility in positioning at the forefront of one of British Columbia’s most exciting exploration plays.”

“By providing early-stage funding to TDG, we aim to support TDG’s exploration efforts to validate the Greater Shasta project. The exciting high-grade Freeport-Amarc AuRORA discovery is less than 200 metres from the border of TDG’s claims,” Coles said.

“Also importantly, both geochemical and geophysical data indicate the potential for the mineralized trend to continue over onto TDG’s 100% owned claims.”

Upon closing of the investment and project sale, Skeena would have acquired 22 million, or 13%, of TDG’s outstanding share capital.