Treasury Metals Provides Project Update and Announces Loan Extension
Treasury Metals Provides Project Update and Announces Loan Extension
TSX: TML
TORONTO
,
May 8, 2017
/CNW/ -
Treasury Metals Inc.
(
"Treasury"
or the
"Company"
) is pleased to provide a number of important corporate and project
updates.
Permitting Progress
The Company and AMEC Foster Wheeler (
"AMEC"
) have completed the information request responses and accompanying technical support as part of the
Federal Government of
Canada's
Environmental Assessment process (
"Federal EA"
). The responses include significant additional project related work
completed in order to provide responses to comments and questions received from both the government technical review and public open house processes. This
additional work will also be used as part of the ongoing engagement and consultation with the respective Aboriginal communities.
Production Fee Buy Back
The Company is also reporting that it exercised its option to repurchase an outstanding US$10/oz Au production fee with Extract Advisors LLC (
"Extract"
) and
Loinette Company Leasing Ltd. (
"
Loinette
"
) (collectively the
"Lenders"
) for total consideration of US$350,000. The production fee buy back eliminates the future
cost of the production fee in its entirety and enhances the overall project economics at Goliath Gold Project.
Term Loan Extension
On
May 5, 2017
, the Company entered into a binding term sheet (the
"Loan Extension"
) in connection with the Company's existing
US$4.4 million
term loan
which is comprised of two tranches (the
"Term Loan"
) with the Lenders. The Loan Extension will amend, among other terms, the maturity date of the Term Loan,
extending it to
April 2, 2019
, from
September 20, 2017
. The Loan Extension will be superseded with a definitive agreement to be entered into by the Company and
the Lender on or around
May 19, 2017
(the
"Closing Date"
). The terms of the Loan Extension will be subject to TSX approval.
Pursuant to the terms of the Loan Extension,
US$2.2 million
of the Term Loan shall be convertible at the election of the Lenders into common shares in the
capital of the Company (the
"Common Shares"
) at a conversion price fixed at
C$0.90
per Common Share, representing approximately a 37.5% premium to the
closing price of the Common Shares on
May 5, 2017
prior to entering into the binding term sheet (
"Tranche 1"
).
The remaining principal amount of
US$2.2 million
of the Term Loan shall be unchanged and continue to be convertible into Common Shares at a price equal to
C$0.588
per Common Share and will have no further amendments ( "
Tranche 2
").
Pursuant to the terms of the Loan Extension, the applicable interest rate in respect of Tranche 2 has been reduced to LIBOR (minimum 200 basis points) plus
6.5% from 8.5%.
As consideration to the Lenders for entering into the Loan Extension, the Company will pay the Lenders the following (a) an extension fee of US$88,000 in
consideration for an extension to the maturity date, (b)
US$14,000
in connection with the reduction to the applicable interest rate; and (c) issue to the Lenders an
aggregate of 1 million common share purchase warrants (the
"Warrants"
), entitling the Lenders to purchase Common Shares as set out below:
Issuance of 300,000 Warrants on the Closing Date for a period of 3 years, to purchase a Common Share at an exercise price of
C$0.75
per Common Share;
Issuance of 400,000 Warrants on the Closing Date for a period of 3 years, to purchase a Common Share at an exercise price of
C$0.85
per Share; and
Issuance of 300,000 Warrants on the Closing Date for a period of 18 months, to purchase a Common Share at an exercise price of
C$0.77
per Share.
Chris Stewart
, President and Chief Executive Officer, commented, "We are pleased with the progress being made by our team on the Federal EA permitting work
as well as the other milestones that were communicated in our Strategic Update press release on
March 1
st
. We remain focused on advancing the Goliath
Project towards a construction decision in H2 of 2018."
To view further details about the Company and Goliath Gold Project, please visit the Company's website at
www.treasurymetals.com
.
About Treasury Metals Inc.:
Treasury Metals Inc. is a gold focused exploration and development company with assets in
Ontario, Canada
and is listed on the Toronto Stock Exchange ("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
next 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 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.
Follow us on Twitter
@TreasuryMetals
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 management of the Company expect, are forward-looking statements. Actual results or developments
may differ materially from those in forward-looking statements. Treasury Metals 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/May2017/08/c1724.html
%SEDAR: 00027114E
For further information:
Chris Stewart, President and Chief Executive Officer, T: 1.416.214.4654, [email protected]; Greg Ferron, Vice
President, Corporate Development, T: 1.416.214.4654, [email protected]
CO: Treasury Metals Inc.
CNW 10:36e 08-MAY-17