Eskay signs LOI to option up to 60% in part of SIB

Mr. Mac Balkam reports:

Eskay Mining Corp. has signed a letter of intent with a senior mining company to option up to a 60-per-cent undivided interest in part of the SIB property. The part of the SIB property subject to the option consists of 30 mining claims representing approximately 4,823 hectares or approximately 10 per cent of the SIB property land package. Eskay holds an 80-per-cent undivided interest in the SIB property pursuant to a joint venture agreement with St. Andrew Goldfields Ltd., a wholly owned subsidiary of Kirkland Lake Gold Ltd., which holds a 20-per-cent undivided interest. The remainder of the SIB property will remain subject to the terms of the joint venture agreement between Eskay and St. Andrew. Pursuant to the terms of the joint venture agreement, St. Andrew has a right of first refusal for 21 calendar days to option the optioned property on the same terms as the LOI, failing which, Eskay will proceed to option the optioned property to the optionee.

The optionee can earn a 51-per-cent undivided interest in the optioned property by completing a $300,000 private placement into Eskay at 20 cents per share, subject to the rules of the TSX Venture Exchange, and expending $11.7-million on the optioned property over three years ($3.7-million in the first year and $4-million in each of the second and third years of the option). In the event that the price of gold does not meet certain thresholds in any option year, the optionee has the right to reduce minimum expenditures to $2-million in such option year and the term of the option will be extended for a further year, subject to the requirement by the optionee to spend at least $10-million in the first three years of the option (in accordance with the terms of the joint venture agreement). Once a 51-per-cent undivided interest is earned, the optionee can either proceed to form a joint venture (with the optionee holding 51 per cent, Eskay holding 29 per cent and St. Andrew holding 20 per cent (assuming it contributes its pro rata share of expenditures on the optioned property)) or exercise a second option to earn a further 9-per-cent undivided interest in the optioned property for an aggregate 60-per-cent undivided interest (with the optionee holding 60 per cent, Eskay holding 20 per cent and St. Andrew holding 20 per cent (assuming it contributes its pro rata share of expenditures on the optioned property)) by either delivering a preliminary economic assessment or completing 23,000 metres of diamond drilling on the optioned property. Eskay has a carried interest during the option term but St. Andrew must either contribute its pro rata share of expenditures or be diluted. If St. Andrew is diluted to a 10-per-cent-or-less interest in the optioned property, it will be converted to a holder of a 2-per-cent net smelter return royalty in the optioned property. Once a joint venture is formed, Eskay will be carried for any joint venture expenditures in respect of the optioned property it would otherwise be required to make until the earlier of a production decision by the technical committee or an aggregate of $10-million in expenditures has been made on its behalf (for example, if Eskay held a 20-per-cent undivided interest in the optioned property on the formation of the joint venture, it would not be required to finance its 20-per-cent undivided interest until an aggregate of a further $50-million had been spent on the optioned property). The Eskay financing, with interest, is repayable by Eskay out of 100 per cent of Eskay’s free cash flow from production of the optioned property.

The option is subject to a number of conditions including St. Andrew waiving its right of first refusal, certain technical amendments being made to the joint venture agreement, the grant of certain rights of first refusal to the optionee, the execution of a formal option agreement, TSX Venture Exchange approval and such other conditions as are usual for a transaction of this nature.

For further information regarding the SIB property, see the company’s press releases of Oct. 17, 2016, Aug. 8, 2016, May 9, 2016, and Jan. 23, 2013.

© 2017 Canjex Publishing Ltd. All rights reserved.

Part 2

Eskay Mining exploration plan for year 2017 – part 2

Symbol: ESK-TSX

Part 1

Eskay Mining exploration plan for year 2017 – part 1

Symbol: ESK-TSX

Closing Of Debt Settlement

Eskay Mining Corp. (“Eskay” or the “Company”) wishes to announce that,
further to the press release issued February 17, 2016, it has settled
$160,000 of management fees owed to a company controlled by an insider of
the Company in consideration for the issuance of 1,855,072 common shares of
the Company The securities issued are legended and restricted from trading
until July 4, 2016.

The insider debt settlement is exempt from the valuation and minority
shareholder approval requirements of Multilateral Instrument 61-101 (“MI
61-101”) by virtue of the exemptions contained in sections 5.5(a) and
5.7(1)(a) of MI 61-101 in that the fair market value of the consideration
for the securities of the Company to be issued to insider does not exceed
25% of its market capitalization.

About Eskay Mining Corp:

Eskay Mining Corp (TSX VENTURE:ESK) is a TSX Venture Exchange listed
company, headquartered in Toronto, Ontario. Eskay is an exploration company
focused on the exploration and development of precious and base metals in
British Columbia in a highly prolific, poly metallic area known as the
Eskay Rift Belt located in the “Golden Triangle”, 70km northwest of
Stewart, BC. The Company currently holds mineral tenures in this area
comprised of 177 claims (130,000 acres).

All material information on the Company may be found on its website at and on SEDAR at

Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.

Eskay Mining Corp.

TSX Venture closing price for ESK-V
Date: 2016/03/03
Closing Price: 0.11