First Mining Announces Closing of Transaction with Treasury Metals to Combine the Goldlund and Goliath Projects in Ontario, Canada Creates a District-Scale, Multi-Million Ounce Gold Developer
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NEWS RELEASE
First Mining Announces Closing of Transaction with Treasury Metals to Combine
the Goldlund and Goliath Projects in Ontario, Canada
Creates a District-Scale, Multi-Million Ounce Gold Developer
August 7, 2020 – Vancouver, Canada – First Mining Gold Corp. (“First Mining” or the “Company”) (TSX:
FF) (OTCQX: FFMGF) (FRANKFURT: FMG) is pleased to announce that it has closed the previously
announced transaction (the "Transaction") with Treasury Metals Inc. (“Treasury Metals” or “TML”) (TSX:
TML) (OTCQX: TSRMF) (FRANKFURT: TRC) pursuant to which Treasury Metals has acquired all of the issued
and outstanding shares of Tamaka Gold Corporation (“Tamaka”), a wholly -owned subsidiary of First
Mining that owns the Goldlund Gold Project (“Goldlund”) (the “Transaction”). Combining Goldlund with
Treasury Metals’ adjacent Goliath Gold Project (“Goliath”) has created a district-scale, multi-million-ounce
gold project positioned for advancement towards construction in a favourable mining jurisdiction.
“We are delighted to become the largest shareholder of Treasury Metals and are excited to see the
combined Goldlund -Goliath project move forward” stated Dan Wilton, CEO of First Mining. “This
combination has already unlocked meaningf ul value for First Mining shareholders and leaves the
Company with significant exposure to the strong exploration potential at Goldlund . We are also excited
that our shareholders will become direct shareholders in Treasury Metals once we distribute a portion of
the equity consideration to First Mining shareholders next year . Treasury Metals is now well-funded to
advance both projects through an economic study to better understand the merits and synergies of these
adjacent properties. Concurrently, through further drilling and work programs, we look forward to seeing
Treasury Metals unlock the significant resource growth p otential of both assets through exploration of
both the existing resource areas and the district-scale land package.”
Under the Transaction, as consideration for the acquisition by Treasury Metals of Tamaka, First Mining
received: (i) 130 million common sh ares (“ TML Common Shares ”) of Treasury Metals (the “ Share
Consideration”); (ii) 35 million common share purchase warrants of Treasury Metals (the “ TML
Warrants”), with each TML Warrant entitling the holder thereof to purchase one TML Common Share at
an exercise price of $0.50 for a period of 36 months from the closing date of the Transaction (the “Warrant
Consideration”); (iii) a 1.5% net smelter returns royalty covering all of the Goldlund claims (the “Goldlund
Royalty”), with the option for Treasury Metals to buy-back 0.5% of the Goldlund Royalty for $5.0 million;
and (iv) a milestone cash payment of $5.0 million, with 50% payable upon receipt of a final and binding
mining lease under the Mining Act (Ontario) to extract ore from an open pit mine at Goldlun d, and the
remaining 50% payable upon the extraction of 300,000 tonnes of ore from a mine at Goldlund.
As previously announced on June 3 , 2020, First Mining intends to distribute 70 million TML Common
Shares and 35 million TML Warrants directly to First Mining shareholders within 12 months of closing the
Transaction. In connection with the Transaction, Treasury Metals and First Mining also entered into an
investor rights agreement (the “Investor Rights Agreement”) pursuant to which First Mining was entitled
to nominate three directors to the board of directors of Treasury Metals (the “ Treasury Board ”).
Additionally: (i) for so long as First Mining holds greater than 10% of the issued and outstanding TML
Common Shares, First Mining shall have the right to nominate two nominees for election to the Treasury
Board; and (ii) for so long as First Mining holds greater than 5% but less than 10% of the issued and
outstanding TML Common Shares, First Mining shall have the right to nominate one nominee for election
to the Treasury Board.
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First Mining nominated Daniel W. Wilton, Frazer Bourchier and David Whittle to the Treasury Board, and
all three of those individuals were conditionally approved as directors of Treasury Metals, pending closing
of the Transaction, by the shareholders of Treasury Metals at TML’s Annual General and Special Meeting
that was held on August 5, 2020 to approve the Transaction. With the Transaction now closed, Daniel W.
Wilton, Frazer Bourchier and David Whittle have all been appointed to the Treasury Board as of the date
of this news release. In addition, it is expected that a four-member technical committee will be formed at
the next meeting of the Treasury Board and First Mining will be en titled to appoint two members of this
committee.
Goldlund-Goldlund Work Program
Treasury Metals has initiated a number of important work programs to advance both the Goliath and
Goldlund gold projects. These activities include:
• Completion of an economic evaluation of a Goliath plus Goldlund scenario. Technical studies are
underway to support this analysis, including plant and processing facilities, mining optimization,
and an evaluation of potential operations at Goliath (underground and open pit) combined with
Goldlund open pit mining scenarios. Future technical studies are also anticipated to include an
optimization of the tailings storage facilities to review potential efficiencies that may be gained
from developing the two projects in tandem. Results of this study are anticipated in late 2020.
• The commencement of a 25,000-metre drill program. Drilling at Goldlund will be focused on infill
and expansion starting with Zone 1, 4 and 8. At Goliath, drilling will continue to focus on potential
expansion of the east C Zone within the resource area in addition to exploration drilling on the
prospective regional targets recently identified through IP and soil sample programs.
• Environmental baseline collection commenced to assist with the development and permitting
activities for Goldlund. Treasury Metals has also engaged additional support to assist with ongoing
permitting efforts at Goliath and continues to engage and discuss o perational and development
plans with regional Indigenous communities, the public, and local stakeholders.
Early Warning Disclosure
Treasury Metals was incorporated under the laws of the Province of Ontario under the Business
Corporations Act (Ontario) The head office of Treasury Metals is located at the Exchange Tower, 130 King
Street West, Suite 3680, Box 99, Toronto, Ontario M5X 1B1. The TML Common Shares are traded on the
Toronto Stock Exchange (“TSX”).
First Mining is a Canadian mineral exploration and development company incorporated under the laws of
British Columbia. First Mining’s head office is located at the following address Suite 2070 - 1188 West
Georgia Street, Vancouver, British Columbia, V6E 4A2.
Pursuant to the Transaction, First Mining acquired: (i) 130 million TML Common Shares; (ii) 35 million
Warrants , with each Warrant entitling the holder thereof to purchase one TML Common Share at an
exercise price of $0.50 for a period of 36 months. Prior to the Transaction, First Mining held no Shares and
no Warrants.
As a result of the Transaction, First Mining’s ownership interest in Treasury Metals increased to 130 million
TML Common Shares, representing approximately 43% of the Shares outstanding on a non-diluted basis,
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based on the number of Shares issued and outstanding immediately following the completion of
Transaction.
Assuming the full exercise of the Warrants, an aggregate of 165 million TML Common Shares would be
owned by First Mining, which would represent approximately 49% of the TML Shares outstanding, based
on the number of Shares issued and outstanding immediately following the completion of Tran saction,
and including TML Common Shares issuable on exercise of the Warrants.
Following the Transaction, on receipt of necessary regulatory approvals, Treasury Metals will consolidate
its common shares on a 3 to 1 basis (the “ Consolidation”). The Warrant s and Shares issuable to First
Mining pursuant to the Share Purchase Agreement will be adjusted in accordance with the Consolidation.
The numbers in this press release are expressed on a pre-Consolidation basis unless otherwise stated.
First Mining’s decision to complete the Transaction was made in the context of its overall investment
purposes. First Mining will continue to review its investment alternatives from time to time and may
determine to increase or decrease its equity ownership in Treasury Metals through the acquisition or sale
of additional outstanding common shares or other securities of Treasury Metals, either through open
market or privately negotiated transactions in accordance with applicable securities laws.
To obtain a copy of the early warning report please contact Spiros Cacos, Vice President, Investor Relations
at the contact information set out below.
Advisors and Counsel
Cormark Securities Inc. acted as financial advisor to First Mining. Blake, Cassels & Graydon LLP acted as
Canadian legal counsel to First Mining, and Dorsey & Whitney LLP acted as U.S. legal counsel to First
Mining.
Qualified Person
Hazel Mullin, P.Geo., Director, Data Management and Technical Services of First Mining, is a “ Qualified
Person” for the purposes of National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI
43-101”), and she has reviewed and approved the scientific and technical disclosure contained in this
news release.
About First Mining Gold Corp.
First Mining is a Canadian gold developer focused on the development and permitting of the Springpole
Gold Project in northwestern Ontario. Springpole is one of the largest undeveloped gold projects in
Canada, currently hosting a mineral resource base of 4.67 million ounces of gold in the Indicated category
and 0.23 million ounces of gold in the Inferred category 1. A Pre -Feasibility Study is underway, with
completion targeted in early 2021, and permitting is on -going with submission of the Environmental
Impact Statement targeted for 2021. The Company also hold s a large equity position in Treasury Metals
who are advancing the Goldlund -Goliath gold projects in Ontario towards construction. First Mining’s
portfolio of gold projects in eastern Canada also includes the Pickle Crow (being advanced in partnership
with Auteco Minerals Ltd.), Cameron, Hope Brook, Duparquet, Duquesne, and Pitt gold projects.
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First Mining was created in 2015 by Mr. Keith Neumeyer, founding President and CEO of First Majestic
Silver Corp.
ON BEHALF OF FIRST MINING GOLD CORP.
Daniel W. Wilton
Chief Executive Officer and Director
For further information, please contact:
Spiros Cacos | Vice President, Investor Relations
Direct: +1 604 639 8825 | Toll Free: 1 844 306 8827 | Email: [email protected]
www.firstmininggold.com
Note:
1. These numbers are from the independent technical report titled “Preliminary Economic Assessment Update for
the Springpole Gold Project, Ontario, Canada”, dated November 5, 2019, which was prepared by SRK Consulting
(Canada) Inc. in accordance with N ational Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI
43-101”) and is available at www.sedar.com under First Mining’s SEDAR profile. Readers are cautioned that the
PEA is preliminary in nature, it includes i nferred mineral resources that are considered too speculative
geologically to have the economic considerations applied to them that would enable them to be categorized as
mineral reserves, and there is no certainty that the PEA will be realized.
Cautionary Note Regarding Forward-Looking Statements
This news release includes certain "forward -looking information” and "forward -looking statements” (collectively
"forward-looking statements”) within the meaning of applicable Canadian and United States securities legislation
including the United States Private Securities Litigation Reform Act of 1995. These forward -looking statements are
made as of the date of this news release. Forward -looking statements are frequently, but not always, identified by
words such as "expects”, "anticipates”, "believes”, “plans”, “projects”, "intends”, "estimates”, “envisages”,
"potential”, "possible”, “strategy”, “goals”, “objectives”, or variations thereof or stating that certain actions, events
or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative of any of these
terms and similar expressions.
Forward-looking statements in this news release relate to future events or future performance and reflect current
estimates, predictions, expectations or beliefs regarding future events and include, but are not limited to, statements
with respect to: (i) the advancement of a combined Goliath -Goldlund gold project towards construction and the
upside potential of such a combined gold project; (ii) the Company’s plans to distribute 70 million TML Shares and all
35 million TML Warrants to the Company’s shareholders and the timing for completion of such distribution; (iii) timing
for Treasury Metals to complete a preliminary economic assessmen t on a combined Goliath -Goldlund gold project
and to carry out future technical studies on the combined project; (iv) the 25,000-metre drill program at the combined
Goliath-Goldlund gold project and any plans for Treasury Metals to continue drilling at Goliath and Goldlund and the
potential for resource growth and future exploration success from all such drill programs; (v) any milestone -based
payments due to the Company under the Transaction; (vi) the Company’s rights to nominate individuals to the
Treasury Board under the Investor Rights Agreement; (vii) timing for the formation of the Technical Committee; (viii)
timing for the completion of a Pre-Feasibility Study for Springpole; (ix) timing for the submission of an Environmental
Impact Statement for Spri ngpole; and (x) realizing the value of the Company’s gold projects for the Company’s
shareholders. All forward-looking statements are based on First Mining's or its consultants' current beliefs as well as
various assumptions made by them and information currently available to them. There can be no assurance that such
statements will prove to be accurate, and actual results and future events could differ materially from those
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anticipated in such statements. Forward-looking statements reflect the beliefs, opinions and projections on the date
the statements are made and are based upon a number of assumptions and estimates that, while considered
reasonable by the respective parties, are inherently subject to significant business, economic, competitive, political
and social uncertainties and contingencies. Many factors, both known and unknown, could cause actual results,
performance or achievements to be materially different from the results, performance or achievements that are or
may be expressed or implied by s uch forward -looking statements and the parties have made assumptions and
estimates based on or related to many of these factors. Such factors include, without limitation: the presence of and
continuity of metals at Goldlund at estimated grades; success in realizing drilling programs; fluctuations in the spot
and forward price of gold, silver, base metals or certain other commodities; fluctuations in the currency markets (such
as the Canadian dollar versus the U.S. dollar); changes in national and local gove rnment, legislation, taxation,
controls, regulations and political or economic developments; risks and hazards associated with the business of
mineral exploration and exploration drilling programs, development and mining (including environmental hazards,
industrial accidents, unusual or unexpected formations, pressures, cave -ins and flooding); the presence of laws and
regulations that may impose restrictions on mining; employee relations; relationships with and claims by local
communities, indigenous popula tions and other stakeholders; availability and increasing costs associated with
mining inputs and labour; the speculative nature of mineral exploration and development; title to properties.; and
the additional risks described in the Company’s Annual Information Form for the year ended December 31, 2019 filed
with the Canadian securities regulatory authorities under the Company’s SEDAR profile at www.sedar.com, and in
the Company’s Annual Report on Form 40-F filed with the SEC on EDGAR.
First Mining cautions that the foregoing list of factors that may affect future results is not exhaustive. When relying
on our forward -looking statements to make decisions with respect to First Mining, investors and others should
carefully consider the foregoing factors and other uncertainties and potential events. First Mining does not undertake
to update any forward -looking statement, whether written or oral, that may be made from time to time by the
Company or on our behalf, except as required by law.
Cautionary Note to United States Investors
This news release has been prepared in accordance with the requirements of the securities laws in effect in Canada,
which differ from the requirements of U.S. securities laws. Unless otherwise indicated, all resource and reserve
estimates included in this news release have been prepared in accordance with NI 43-101 and the Canadian Institute
of Mining, Metallurgy, and Petroleum 2014 Definition Standards on Mineral Resources and Mineral Reserves. NI 43 -
101 is a rule developed by the Canadian Securities Administrators which establishes standards for all public disclosure
an issuer makes of scientific and technical information concerning mineral projects. Canadian standards, including
NI 43 -101, differ significantly from the requirements of the SEC, and mineral resource and reserve information
contained herein may not be comparable to similar information disclosed by U.S. companies. In particular, and
without limiting the generality of the foregoing, the term "resource” does not equate to th e term "reserves”. Under
U.S. standards, mineralization may not be classified as a "reserve” unless the determination has been made that the
mineralization could be economically and legally produced or extracted at the time the reserve determination is
made. The SEC's disclosure standards normally do not permit the inclusion of information concerning "measured
mineral resources”, "indicated mineral resources” or "inferred mineral resources” or other descriptions of the amount
of mineralization in mineral deposits that do not constitute "reserves” by U.S. standards in documents filed with the
SEC. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be
converted into reserves. U.S. investors should also understand that "inferred mineral resources” have a great amount
of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. It cannot be
assumed that all or any part of an "inferred mineral resource” will ever be upgraded to a higher category. Under
Canadian rules, estimated "inferred mineral resources” may not form the basis of feasibility or pre-feasibility studies
except in rare cases. Investors are cautioned not to assume that all or any part of an "inferred m ineral resource”
exists or is economically or legally mineable. Disclosure of "contained ounces” in a resource is permitted disclosure
under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not
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constitute "reserves” by SEC standards as in -place tonnage and grade without reference to unit measures. The
requirements of NI 43 -101 for identification of "reserves” are also not the same as those of the SEC, and reserves
reported by the Company in compliance w ith NI 43 -101 may not qualify as "reserves” under SEC standards.
Accordingly, information concerning mineral deposits set forth herein may not be comparable with information made
public by companies that report in accordance with U.S. standards.