Treasury Metals Inc. [TML-TSX; TSRMF-OTCQX] completed its previously announced acquisition under a share purchase agreement with First Mining Gold Corp. [FF-TSX; FFMGF-OTCQX; FMG-FSE] whereby Treasury acquired all of the issued and outstanding shares of Tamaka Gold Corp., a wholly owned subsidiary of First Mining that owns a 100% interest in the Goldlund gold project, located adjacent to Treasury’s Goliath gold project in northwestern Ontario.
The transaction was approved by Treasury shareholders at the annual general and special meeting August 5, 2020.
Greg Ferron, CEO of Treasury, commented: “Completion of this acquisition comes at a transformational time for our shareholders and solidifies the Goliath and Goldlund projects as among the largest undeveloped gold assets in Canada. The close proximity of the Goliath-Goldlund gold projects creates a multi-million ounce, district-scale opportunity with significant resource growth potential.”
Treasury Metals has begun work programs to advance both the Goliath and Goldlund gold projects, including 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.
A 25,000-metre drill program is underway. 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. Environmental baseline collection has begun and will assist with the development and permitting for Goldlund.
First Mining received 130 million Treasury common shares, 35 million warrants with each warrant good to buy one at an exercise price of $0.50 for 36 months, a 1.5% net smelter returns royalty covering all of the Goldlund claims with the option for Treasury to buy-back 0.5% of the Goldlund Royalty for $5.0 million; and 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 Goldlund, and the remaining 50% payable upon the extraction of 300,000 tonnes of ore from a mine at Goldlund.
Treasury received shareholder approval to complete its previously announced share consolidation on the basis of three shares for one share effective August 11, 2020.
Treasury plans on the initial development of an open pit gold mine with subsequent underground operations.