NEXG.V · 2018-05-15 12:00:00

Treasury Metals Inc. Provides Update on the Audit of Flow- Through Financings by CRA

Corporate Updates

Treasury Metals Inc. Provides Update on the Audit of Flow-

Through Financings by CRA

TSX: TML

OTCQX: TSRMF

TORONTO

May 15, 2018

/CNW/ -

Treasury Metals Inc. (TSX: TML) (OTCQX: TSRMF) (the "Company")

is providing additional

information further to its 2017 year-end financial statements regarding notification by the Canada Revenue Agency (the "

CRA

") of its

determination in respect of the flow-through spending audit (the "

Audit

") commenced by the CRA in December 2016 regarding certain

expenditures incurred by the Company in the years 2012, 2013, and 2014 that were characterized by the Company as "Canadian Exploration

Expenses" ("

CEE

") for purposes of the

Income Tax Act

(

Canada

Specifically, on

March 7, 2018

the Company was advised by the CRA that the CRA had reclassified approximately

$1.8 million

of CEE to

operating expenses, out of the total

$12.5 million

the Company raised through "flow-through share" offerings (within the meaning of such term in

the

Income Tax Act

(

Canada

)) completed on

December 6, 2011

September 21, 2012

May 1, 2013

, and

December 20, 2013

(the "

Flow-

Through Financings

") and renounced to subscribers (the "

Subscribers

") by the Company pursuant to the applicable subscription and

renunciation agreements entered into with Subscribers. The Company understands from the Part XII.6 assessment described below that a further

approximately

$2.2 million

of CEE has been reclassified by the CRA to Canadian Development Expenses ("

CDE

"). The CRA has advised the

Company that a review of the financings completed prior to, or subsequent to, the Flow-Through Financings is not contemplated at this time.

In addition, pursuant to the Audit, the CRA has notified the Company that it is liable for Part XII.6 tax in the amount of

$477,726

in connection

with the shortfall from the disallowed CEE. The Company understands that this amount reflects a reclassification by the CRA of the approximately

$4.0 million

of CEE renounced to Subscribers in connection with the Flow-Through Financings to either operating expenses or CDE.

The Company disputes the CRA's proposed recharacterizations of expenses from CEE to either CDE or operating expenses and consequently

intends to object to such CRA determinations.

Background

The Company raised the flow-through funds in the Flow-Through Financings to facilitate exploration of its Goliath Gold Project in northwestern

Ontario

. All of the funds raised pursuant to these Flow-Through Financings were expended by the Company on exploration and other ancillary

activities in respect of the Goliath Gold Project and were subsequently renounced to Subscribers in accordance with the subscription and

renunciation agreements entered into with Subscribers.

This reclassification, subject to the Company's objection (as discussed above), could result in each Subscriber that claimed a deduction for such

renounced CEE potentially being assessed with tax and interest owing on the disallowed amount, subject to the particulars of such assessment (if

any) being dependent on the applicable tax rate and individual tax circumstances of each Subscriber. Pursuant to the terms of the subscription and

renunciation agreements entered into by the Company and the Subscribers pursuant to the Flow-Through Financings, the Company has agreed to

indemnify the Subscribers for certain amounts should the CRA reassess such Subscribers for tax attributable to the disallowed renunciation of

CEE. The ultimate quantum of the Company's liability with respect to this indemnification obligation cannot currently be accurately determined.

This press release and the accompanying material change report have been filed in connection with a continuous disclosure review conducted by

the Ontario Securities Commission and it remedies the non-filing of this press release and accompanying material change report as of the date of

receipt of the

March 7, 2018

letter from the CRA.

About Treasury Metals Inc.

Treasury Metals is a gold focused exploration and development company with assets in

Ontario, Canada

and is listed on the TSX under the

symbol "TML". Treasury Metals Inc.'s 100% owned Goliath Gold Project in northwestern

Ontario

is slated to become one of

Canada's

producing gold mines. With first-rate infrastructure currently in place and gold mineralization extending to surface, Treasury Metals plans on the

initial development of an open pit gold mine to feed a 2,500 tonne per day processing plant with subsequent underground operations in the latter

years of the mine life. Treasury Metals is currently in the mine permit process on the Goliath Gold Project.

For more information about Treasury Metals, please visit the Company's website at:

http://www.treasurymetals.com

Forward-looking Statements

This release includes certain statements that may be deemed to be "forward-looking statements". All statements in this release, other

than statements of historical facts, that address events or developments that have yet to occur, including those pertaining to the status

and potential liability associated with the CRA audit are forward-looking statements. Actual results or developments may differ

materially from those in forward-looking statements. The Company 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.

SOURCE

Treasury Metals Inc.

View original content: http://www.newswire.ca/en/releases/archive/May2018/15/c7653.html

%SEDAR: 00027114E

For further information:

Chris Stewart, President and CEO, Tel: 416-214-4654, Email: [email protected]; or Greg Ferron, Vice

President, Corporate Development, Tel: 416-214-4654, Email: [email protected]

CO: Treasury Metals Inc.

CNW 17:00e 15-MAY-18

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