Highlights:
- US$20 million financing
through the sale of a royalty to an affiliate of Sprott Resource
Streaming and Royalty Corp ("SRSR") expected to fund the completion
of economic studies, permitting and community engagement, including
corporate G&A. Summary details of the royalty include:
-
- A US$20 million upfront
payment;
- 2.2% of net smelter returns revenue of all minerals produced
on the properties comprising the Goliath Gold Complex;
- Option, solely at the discretion of the Company, to
repurchase 50% of the Royalty until December
31, 2028;
- Automatic reduction of the royalty rate by 50% upon the
achievement of 1.5 million ounces of gold production;
- The right for SRSR to participate for up to 40% or
US$40 million in future metals
streaming or royalty financing undertaken by the Company.
- The financing is subject to customary closing conditions and
is expected to close towards the end of March 2022.
TORONTO, Feb. 14,
2022 /CNW/ - Treasury Metals Inc. (TSX: TML)
(OTCQX: TSRMF) ("Treasury" or the "Company") is
pleased to announce that it has entered into a royalty agreement
with an affiliate of Sprott Resource Streaming and Royalty Corp.
("SRSR" or "Sprott") in relation to the Company's 100% owned
Goliath Gold Complex ("GGC", or the "Project"), which comprises the
Goliath, Goldlund and Miller Gold Projects. Under the terms
of the agreement, SRSR will pay Treasury consideration of
US$20 million for a 2.2% net
smelter returns royalty (the "Royalty") covering all
minerals produced from the GGC for the life of the Project.
Further details are set out below under "Royalty Transaction
Details". The financing is subject to customary closing
conditions and is expected to close towards the end of March
2022. The proceeds from the financing will be used to advance
the Project to a construction decision, including all economic
studies, permitting, consultations and corporate G&A costs.
Jeremy Wyeth, President and CEO,
commented: "We are extremely pleased to be announcing this
transaction today and excited to bring on Sprott as a partner to
help us move the Goliath Gold Complex forward toward construction
and operation. With the desire to consider financing
alternatives that are less dilutive to our shareholders, we
undertook a process to explore the potential for the sale of a
royalty that culminated in the agreement we announced today.
Upon closing, the Company is well funded with this
US$20m (C$25.5m at current exchange rate) financing, in
addition to the C$6.5 million flow
financing we completed in November
2021 and the C$9.9 million in
cash we had at the end of Q3, 2021, providing the necessary funding
and financial flexibility to take Treasury through studies,
permitting and community consultations to a construction
decision."
Michael Harrison, Managing
Partner, Sprott Resource Streaming and Royalty Corp, commented "We
are pleased to be partnering with Treasury on the Goliath Gold
Complex. We have been monitoring the progress of Goliath for
many years and believe that the Company has the team, the momentum,
and the funding to advance the GGC to a production decision.
We view GGC as a project with long-term cash flow in a Tier-One
mining jurisdiction and an excellent addition to our growing
portfolio of streams and royalties."
Royalty Transaction Details
The Company has entered
into a binding royalty agreement, subject to certain closing
conditions, with SRSR for a US$20
million financing. In exchange for the financing,
Treasury will issue to SRSR a 2.2% Royalty on all minerals produced
from the GGC. This financing secures for the Company, a less
dilutive source of financing, providing sufficient funding to
advance the Project through project development activities towards
project financing and a construction decision while maintaining the
robust economics of the Project.
Buyback
The Company will have a right, to be satisfied
in cash or in shares, at the Company's sole discretion, to
repurchase a 50% interest of the Royalty, which would include 50%
of any future minimum payments, on the following terms;
- On or before December 31, 2024 –
US$14.0 million
- From January 1, 2025 until
December 31, 2025 – US$16.0 million
- From January 1, 2026 until
December 31, 2026 – US$17.0 million
- From January 1, 2027 until
December 31, 2027 – US$18.25 million
- From January 1, 2028 until
December 31, 2028 – US$19.5 million
Step Down
Upon the achievement of 1.5 million ounces
of gold production, the Royalty will automatically reduce by 50%
for no additional consideration by the Company. If commercial
production is not achieved by December 31,
2028, the Royalty will increase by 25% for no additional
consideration by SRSR.
Minimum Payments
Until the earlier of December 31, 2027 and the date that commercial
production is declared, the Company will pay to SRSR, US$500,000, on a quarterly basis, in cash or in
common shares at the Company's sole discretion. If the
Company elects to issue common shares as payment, the common shares
would be issued at a 5% discount to the 5-day VWAP.
Participation Right
If the Company enters into a
potential metals streaming or royalty contract as part of a larger
project financing for the Project, SRSR will have the right to
participate to a maximum of 40% or US$40
million in the proposed transaction on the same terms and
conditions of the proposed transaction.
Closing
The transaction is subject to certain
customary closing conditions. Furthermore, any issuance of
common shares of the Company will require the prior approval of the
Toronto Stock Exchange. The Company expects the transaction to
close towards the end of March
2022.
Advisors and Counsel
PI Financial Corp. is acting as
the Company's financial advisor and Cassels, Brock & Blackwell
LLP is acting as the Company's legal advisor.
About Treasury Metals Inc.
Treasury Metals Inc. is a
gold focused company with assets in Canada. Treasury's Goliath Gold Complex, which
includes the Goliath, Goldlund and Miller deposits, is located in
Northwestern Ontario. The deposits
benefit substantially from excellent access to the Trans-Canada
Highway, related power and rail infrastructure, and close proximity
to several communities including Dryden,
Ontario. The Company also owns several other projects
throughout Canada, including
Weebigee-Sandy Lake Gold Project JV, and grassroots gold
exploration property Gold Rock. Treasury Metals is committed to
inclusive, informed and meaningful dialogue with regional
communities and Indigenous Nations throughout the life of all our
Projects and on all aspects, including: creating sustainable
economic opportunities, providing safe workplaces, enhancing of
social value, and promoting community well-being.
For information on the Goliath Gold Complex, please refer to the
preliminary economic assessment, prepared in accordance with
NI43–101, entitled "NI 43–101 Technical Report & Preliminary
Economic Assessment of the Goliath Gold Complex: and dated
March 10, 2021 with an effective date
of January 28, 2021, led by
independent consultants Ausenco Engineering Canada Inc. The
technical report is available on SEDAR atwww.sedar.com, on the
OTCQX at www.otcmarkets.com and on the Company website at
www.treasurymetals.com.
To view further details about Treasury, please visit the
Company's website at www.treasurymetals.com.
Forward-Looking Statements
This release includes
certain statements that may be deemed to be "forward-looking
information" or "forward-looking statements" pursuant to applicable
laws, including, but not limited to, the completion of the
financing and timing related thereto, use of the proceeds, future
financings of the Company and the Company's development activities.
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. Forward-looking
statements are frequently, but not always, identified by words such
as "expects", "anticipates", "believes", "plans", "projects",
"intends", "estimates", "envisages", "potential", "possible",
"strategy", "goals", "objectives", or variations thereof or stating
that certain actions, events or results "may", "could", "would",
"might" or "will" be taken, occur or be achieved, or the negative
of any of these terms and similar expressions. Actual results or
developments may differ materially from those in forward-looking
statements. Treasury 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.
Since forward-looking information address future events and
conditions, by their very nature they involve inherent risks and
uncertainties. Actual results could differ materially from those
currently anticipated due to a number of factors and risks. These
include, but are not limited to, the satisfaction of the conditions
in the royalty agreement; exploration and production for precious
metals; delays or changes in plans with respect to exploration or
development projects or capital expenditures; the uncertainty of
resource estimates; health, safety and environmental risks;
worldwide demand for gold and base metals; gold price and other
commodity price and exchange rate fluctuations; environmental
risks; competition; incorrect assessment of the value of
acquisitions; ability to access sufficient capital from internal
and external sources; and changes in legislation, including but not
limited to tax laws, royalties and environmental
regulations.
Actual results, performance or achievement could differ
materially from those expressed in, or implied by, the
forward-looking information and, accordingly, no assurance can be
given that any of the events anticipated by the forward-looking
information will transpire or occur, or if any of them do so, what
benefits may be derived therefrom and accordingly, readers are
cautioned not to place undue reliance on the forward-looking
information.
SOURCE Treasury Metals Inc.