Treasury Metals closes Ontario gold project financing

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Treasury Metals Inc. [TML-TSX] said it has raised $4.14 million from an upsized non-brokered private placement financing, with proceeds earmarked for exploration and development activities at its Goliath Gold Complex in northwestern Ontario.

The company issued 29.6 million units priced at $0.14 per unit, each of which consists of one common share and one quarter of a common share purchase warrant. Each whole warrant is exercisable at $0.21 for 60 months following the date of closure.

Certain directors and officers of the company participated in the offering, acquiring 1.52 million units on the same terms as other investors, generating gross proceeds of $213,500.

News that the financing has been completed came after the close of trading on December 19, when Treasury Metals shares rose 6.7% or $0.01 to 16 cents. The shares are currently trading in a 52-week range of 38.5 cents and 12.5 cents.

Back in February, 2023, Treasury Metals announced the results of a National Instrument 43-101-compliant pre-feasibility (PFS) study for ts Goliath Gold Complex, which includes the Goliath, Goldlund and Miller deposits.

The PFS forsees average annual production of 90,000 announces annually, with peak production increasing from 119,000 ounces to 128,000 ounces (year 2). That compares to a 2021 preliminary economic assessment (PEA) which envisaged annual production of 79,000 ounces. Total ounces produced increased to 1.17 million ounces in the first nine years of mine life, compared to 1.06 million ounces in the PEA.

The pre-feasibility study is based on proven and probable reserves of 1.3 million ounces of gold (30.3 million tonnes at 1.3 g/t gold). The estimate for initial capital is pegged at $335 million, including a 30% increase to process plant capacity compared to the PEA, with life of mine capital of $552 million.

The PFS predicts annual EBITDA and free cash flows of $145 million and $106 million, respectively, over the first five years of production. Life-of-mine free cash flows are pegged at $869 million with all-in-sustaining costs (AISC) estimated at US$1,072 on a by-product basis.

The PFS contemplates both open pit and underground mining from the Goliath deposit and open pit mining at the Goldlund and Miller deposits concurrently. The operations will feed a single processing facility located at Goliath at 6,460 tonnes per day or 2.35 million tonnes annually. Goldlund and Miller feed will be hauled by contractor in highway trucks to Goliath.

Measured and indicated resources are estimated at 67.7 million tonnes of 0.98 g/t gold or 2.14 million ounces of gold and 3.42 g/t silver or 3.52 million ounces.

The company recently announced drilling results on the Fold Nose target, which contains lenses of the felsic volcanic unit which hosts the Goliath Deposit. Hole TL22-641 returned 1.03 g/t over 27 metres near surface from 6.0 to 33 metres downhole, including 4.76 g/t over 1.50 metres, including 5.60 g/t over 1.50 metres. Fold Nose is one of the company’s top exploration targets.

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