Treasury Metals Announces US$20 Million Royalty Financing to Fund Goliath Gold Complex to Construction Decision
Treasury Metals Announces US$20 Million
Royalty Financing to Fund Goliath Gold
Complex to Construction Decision
Highlights:
US$20 million
financing through the sale of a royalty to an affiliate of Sprott Resource
Streaming and Royalty Corp ("SRSR") expected to fund the completion of economic
studies, permitting and community engagement, including corporate G&A. Summary
details of the royalty include:
A
US$20 million
upfront payment;
2.2% of net smelter returns revenue of all minerals produced on the properties
comprising the Goliath Gold Complex;
Option, solely at the discretion of the Company, to repurchase 50% of the Royalty
until
December 31, 2028
;
Automatic reduction of the royalty rate by 50% upon the achievement of 1.5 million
ounces of gold production;
The right for SRSR to participate for up to 40% or
US$40 million
in future metals
streaming or royalty financing undertaken by the Company.
The financing is subject to customary closing conditions and is expected to close
towards the end of
March 2022
.
TORONTO
,
Feb. 14, 2022
/CNW/ -
Treasury Metals Inc.
(TSX: TML) (OTCQX: TSRMF)
("
Treasury
" or the "
Company
") is pleased to announce that it has entered into a royalty agreement
with an affiliate of Sprott Resource Streaming and Royalty Corp. ("SRSR" or "Sprott") in relation to
the Company's 100% owned Goliath Gold Complex ("GGC", or the "Project"), which comprises the
Goliath, Goldlund and Miller Gold Projects. Under the terms of the agreement, SRSR will pay
Treasury consideration of
US$20 million
for a 2.2%
net smelter returns
royalty (the "Royalty")
covering all minerals produced from the GGC for the life of the Project. Further details are set out
below under "Royalty Transaction Details". The financing is subject to customary closing conditions
and is expected to close towards the end of March 2022. The proceeds from the financing will be
used to advance the Project to a construction decision, including all economic studies, permitting,
consultations and corporate G&A costs.
Jeremy Wyeth
, President and CEO, commented: "We are extremely pleased to be announcing this
transaction today and excited to bring on Sprott as a partner to help us move the Goliath Gold
Complex forward toward construction and operation. With the desire to consider financing
alternatives that are less dilutive to our shareholders, we undertook a process to explore the
potential for the sale of a royalty that culminated in the agreement we announced today. Upon
closing, the Company is well funded with this
US$20m
(
C$25.5m
at current exchange rate) financing,
in addition to the
C$6.5 million
flow financing we completed in
November 2021
and the
C$9.9 million
in cash we had at the end of Q3, 2021, providing the necessary funding and financial flexibility to
take Treasury through studies, permitting and community consultations to a construction decision."
Michael Harrison
, Managing Partner, Sprott Resource Streaming and Royalty Corp, commented
"We are pleased to be partnering with Treasury on the Goliath Gold Complex. We have been
monitoring the progress of Goliath for many years and believe that the Company has the team, the
momentum, and the funding to advance the GGC to a production decision. We view GGC as a
project with long-term cash flow in a Tier-One mining jurisdiction and an excellent addition to our
growing portfolio of streams and royalties."
Royalty Transaction Details
The Company has entered into a binding royalty agreement, subject to certain closing conditions,
with SRSR for a
US$20 million
financing. In exchange for the financing, Treasury will issue to SRSR
a 2.2% Royalty on all minerals produced from the GGC. This financing secures for the Company, a
less dilutive source of financing, providing sufficient funding to advance the Project through project
development activities towards project financing and a construction decision while maintaining the
robust economics of the Project.
Buyback
The Company will have a right, to be satisfied in cash or in shares, at the Company's sole discretion,
to repurchase a 50% interest of the Royalty, which would include 50% of any future minimum
payments, on the following terms;
On or before
December 31, 2024
–
US$14.0 million
From
January 1, 2025
until
December 31, 2025
–
US$16.0 million
From
January 1, 2026
until
December 31, 2026
–
US$17.0 million
From
January 1, 2027
until
December 31, 2027
–
US$18.25 million
From
January 1, 2028
until
December 31, 2028
–
US$19.5 million
Step Down
Upon the achievement of 1.5 million ounces of gold production, the Royalty will automatically reduce
by 50% for no additional consideration by the Company. If commercial production is not achieved by
December 31, 2028
, the Royalty will increase by 25% for no additional consideration by SRSR.
Minimum Payments
Until the earlier of
December 31, 2027
and the date that commercial production is declared, the
Company will pay to SRSR,
US$500,000
, on a quarterly basis, in cash or in common shares at the
Company's sole discretion. If the Company elects to issue common shares as payment, the
common shares would be issued at a 5% discount to the 5-day VWAP.
Participation Right
If the Company enters into a potential metals streaming or royalty contract as part of a larger
project financing for the Project, SRSR will have the right to participate to a maximum of 40% or
US$40 million
in the proposed transaction on the same terms and conditions of the proposed
transaction.
Closing
The transaction is subject to certain customary closing conditions. Furthermore, any issuance of
common shares of the Company will require the prior approval of the Toronto Stock Exchange. The
Company expects the transaction to close towards the end of
March 2022
.
Advisors and Counsel
PI Financial Corp. is acting as the Company's financial advisor and Cassels, Brock & Blackwell LLP
is acting as the Company's legal advisor.
About Treasury Metals Inc.
Treasury Metals Inc. is a gold focused company with assets in
Canada
. Treasury's Goliath Gold
Complex, which includes the Goliath, Goldlund and Miller deposits, is located in
Northwestern
Ontario
. The deposits benefit substantially from excellent access to the Trans-Canada Highway,
related power and rail infrastructure, and close proximity to several communities including
Dryden,
Ontario
. The Company also owns several other projects throughout
Canada
, including Weebigee-
Sandy Lake Gold Project JV, and grassroots gold exploration property Gold Rock. Treasury Metals
is committed to inclusive, informed and meaningful dialogue with regional communities and
Indigenous Nations throughout the life of all our Projects and on all aspects, including: creating
sustainable economic opportunities, providing safe workplaces, enhancing of social value, and
promoting community well-being.
For information on the Goliath Gold Complex, please refer to the preliminary economic assessment,
prepared in accordance with NI43–101, entitled "NI 43–101 Technical Report & Preliminary
Economic Assessment of the Goliath Gold Complex: and dated
March 10, 2021
with an effective
date of
January 28, 2021
, led by independent consultants Ausenco Engineering Canada Inc. The
technical report is available on SEDAR at
www.sedar.com
, on the OTCQX at
www.otcmarkets.com
and on the Company website at
www.treasurymetals.com
.
To view further details about Treasury, please visit the Company's website at
www.treasurymetals.com
.
Forward-Looking Statements
This release includes certain statements that may be deemed to be "forward-looking information"
or "forward-looking statements" pursuant to applicable laws, including, but not limited to, the
completion of the financing and timing related thereto, use of the proceeds, future financings of the
Company and the Company's development activities. All statements in this release, other than
statements of historical facts, that address events or developments that management of the
Company expect, are forward-looking statements. 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. Actual results or developments may differ materially from those in forward-looking
statements. Treasury disclaims any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise, save and except as
may be required by applicable securities laws.
Since forward-looking information address future events and conditions, by their very nature they
involve inherent risks and uncertainties. Actual results could differ materially from those currently
anticipated due to a number of factors and risks. These include, but are not limited to, the
satisfaction of the conditions in the royalty agreement; exploration and production for precious
metals; delays or changes in plans with respect to exploration or development projects or capital
expenditures; the uncertainty of resource estimates; health, safety and environmental risks;
worldwide demand for gold and base metals; gold price and other commodity price and exchange
rate fluctuations; environmental risks; competition; incorrect assessment of the value of
acquisitions; ability to access sufficient capital from internal and external sources; and changes in
legislation, including but not limited to tax laws, royalties and environmental regulations.
Actual results, performance or achievement could differ materially from those expressed in, or
implied by, the forward-looking information and, accordingly, no assurance can be given that any
of the events anticipated by the forward-looking information will transpire or occur, or if any of
them do so, what benefits may be derived therefrom and accordingly, readers are cautioned not to
place undue reliance on the forward-looking information.
SOURCE
Treasury Metals Inc.
View original content:
http://www.newswire.ca/en/releases/archive/February2022/14/c8079.html
%SEDAR: 00027114E
For further information:
Jeremy Wyeth, President & CEO, T: +1 416 214 4654; Orin Baranowsky,
CFO, T: +1 416 214 4654, Email: [email protected], Twitter @TreasuryMetals
CO: Treasury Metals Inc.
CNW 06:30e 14-FEB-22