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The Loan Extension will be superseded with a definitive agreement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
1st. 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.