American Creek gains on $210M sale of Treaty Creek stake in BC

Shares in American Creek Resources (TSXV: AMK) shot up Friday on the news it entered into a non-binding letter of intent with private company Cunningham Mining to acquire all of its shares and its 20% stake in the Treaty Creek project for $209.5 million. 
 
American Creek shares closed 54% higher at 18.5¢ apiece on Friday, a new 52-week high, valuing the company at $73.5 million. 
 
Treaty Creek, a gold-copper-silver project in the Golden Triangle region of northwest British Columbia, is a joint venture project in which Tudor Gold (TSXV: TUD) holds a 60% interest, with each of American Creek and Teuton Resources (TSXV: TUO) holding 20%. 
 
“We are excited that Cunningham has recognized the value and the potential of the Treaty Creek property despite the tough junior market conditions we are currently experiencing,” American Creek CEO Darren Blaney said in a news release on Thursday. “We believe this proposed transaction may provide not only a liquidity event for our longstanding shareholders, but also represents an opportunity for shareholders to potentially realize a 250% plus premium to the present market valuation of their equity in the company.” 

Very golden opportunity 

Treaty Creek, about 250 km northeast of Prince Rupert, is regarded as among the largest gold discoveries in the last 30 years. The project is next to Seabridge Gold’s (TSX: SEA; NYSE: SA) KSM property to the southwest and Newmont’s (TSX: NGT; NYSE: NEM) Brucejack gold mine to the southeast. 
 
The deal with Cunningham would see the private company secure all the issued and outstanding securities and common shares of American Creek for 43¢ per share. That represents a premium of about 274% to the 11.5¢ closing price of American Creek’s shares on the TSXV on Wednesday. 
 
The letter of intent is subject to several conditions including an exclusivity period until Aug. 5, during which American Creek and Cunningham will deal only with each other; and American Creek will continue operating its business as usual. If Cunningham fails to provide American Creek with the $209.5 million before Aug. 5, Cunningham must pay a failure fee of up to $115,000. 

Treaty Creek contains the Goldstorm deposit, which hosts 27.8 million indicated gold-equivalent ounces for 21.6 million oz. gold grading 0.92 grams gold per tonne, 2.8 billion lb. copper grading 0.18% copper, and 128.7 million oz. silver grading 5.48 grams silver. Its inferred resource comprises about 6 million gold-equivalent oz. containing 4.8 million oz. gold grading 1.01 gram gold, 503.2 million lb. copper grading 0.15% copper, and 28.9 million oz. silver grading 6.02 grams silver.