Treasury Metals closes Blackwolf deal, raises $4.4 million

Treasury Metals Inc. [TML-TSX], TSRMF-OTCQX] has closed the acquisition of Blackwolf Copper and Gold Ltd. [BWCG-TSXV, BWCGF-OTCQB] and completed the first tranche of a concurrent financing that generated gross proceeds of $4.4 million.

The first tranche of the previously announced non-brokered private placement consisted of 19.1 flow-through units. The second tranche is expected to consist of 8.7 million flow-through units, generating additional proceeds of $1.9 million. The second tranche is expected to be completed by July 5, 2024.

Each flow-through unit consists of one treasury share that is issued as a flow-through share under the Income Tax Act (Canada) and common share purchase warrant. Each warrant is exercisable at a price of 35 cents until July 2, 2027.

On Wednesday, Treasury Metals shares eased 2.4% or $0.005 to 20.5 cents. The shares currently trade in a 52-week range of 29.5 cents and 11.5 cents.

Treasury recently agreed to acquire Blackwolf Copper in a bid to advance the Goliath Gold Complex in northwestern Ontario towards production. The combined company’s Niblack Copper-Gold development project in Alaska (currently a 100% Blackwolf-owned asset) and other exploration properties also represent promising upside for future growth.

“Completing this transaction will not only accelerate the ability to build Goliath, but the new vision of a buy/build strategy,’’ said Treasury President Morgan Lekstrom. Jeremy Wyeth, CEO and director of the combined company, welcomed financier Frank Giustra as a new strategic investor.

Under the agreement, Treasury acquired all the issued and outstanding shares of Blackwolf, with each Blackwolf share being exchanged for 0.607 of a Treasury Metals share.

Back in February, 2023, Treasury Metals announced the results of a National Instrument 43-101-compliant pre-feasibility (PFS) study for its 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).

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.

Blackwolf’s Niblack copper-gold project was acquired under an option agreement with Teck Resources Ltd. (TECK.B-TSX, TECK.A-TSX, TECK-NYSE), which obliged Blackwolf to pay $1.25 million in cash to Teck upon certain change of control and other events. That agreement has since been amended to allow Blackwolf to satisfy the payment to Teck by issuing 9.7 million shares to Teck.

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