Treasury Metals Inc. (
TSX: TML; OTCQX:
TSRMF) (“
Treasury” or
“
TML”) and
Blackwolf Copper and Gold Ltd.
(TSXV:BWCG; OTCQB: BWCGF) (“
Blackwolf” or
“
BWCG”) are pleased to announce that they have
entered into a definitive arrangement agreement dated May 1, 2024
(the “
Agreement”) to combine the two companies to
advance the Goliath Gold Complex Project (“
GGC
Project”) in Ontario towards production with a
strengthened leadership, balance sheet and capital markets team
(the “
Transaction”). The combined company’s
Niblack Copper-Gold development project in Alaska and other
exploration properties also represent promising upside projects for
future growth.
Transaction Highlights:
- Potential
Near-Term Gold Production: Based on a prefeasibility study
conducted in February 2023, the GGC Project is poised for
production with a forecasted 13-year mine life. It anticipates
producing 109,000 ounces of gold annually at a cash cost1 of US$892
per ounce and an All-in Sustaining Cost (AISC)1 of US$1,037 per
ounce during the first nine years. The prefeasibility study
projected a net present value (NPV) of $493 million at a 5%
discount rate, and an internal rate of return (IRR) of 33.5% based
on a gold price of US$1,950 per ounce. The project benefits from
readily available world class infrastructure and has secured a
Federal Environmental Assessment approval. The final feasibility
study and permitting processes are currently underway.
- Strong
Financial Position: The balance sheet will be fortified with a
combined cash position of more than C$10 million, plus a proposed
concurrent minimum C$4 million flow-through financing.
- Enhanced
Capital Markets Focus: New capital markets strategy to be led by
cornerstone investor Frank Giustra complements significant
expertise in mine permitting, construction, operations, and
exploration to create value for shareholders.
- Renewed
Exploration Commitment: Exploration efforts are expected to be
intensified within the Dryden, Ontario district, focusing on
expanding the current resource area. An experienced team will
oversee these efforts, aiming to simultaneously advance development
and exploration, maximizing dual-track value realization.
- Growth and
Consolidation Strategy: The companies are actively pursuing a
proactive strategy to assess and undertake strategic acquisitions,
aiming to accelerate growth and strengthen its industry
position.
Pursuant to the Transaction, Treasury will
acquire all of the issued and outstanding common shares of
Blackwolf. Under the terms of the Agreement, each BWCG share will
be exchanged for 0.607 of a TML share. Upon completion of the
Transaction, existing TML and BWCG shareholders will own
approximately 68.3% and 31.7% of TML respectively (after closing of
the transactions described below and prior to the completion of the
minimum C$4 million concurrent financing, which is further
described below).
Jeremy Wyeth, President & CEO of
Treasury, and expected CEO of the combined company,
commented: “This combination represents a positive evolution for
Treasury. With the sponsorship of mining and capital markets
leader, Frank Giustra, we will undertake a corporate strategy that
continues the advanced-stage development of the GGC Project, and
introduces a more aggressive exploration strategy across the new
portfolio and sets the stage for heightened strategic corporate
activity.”
Morgan Lekstrom, CEO of Blackwolf, and
expected President of the combined company, commented:
“This is a tremendous win-win opportunity for Blackwolf and
Treasury shareholders. Treasury has done an incredible job of
advancing the GGC Project through the start of engineering and
permitting, and we are optimistic that it can evolve into a major
Canadian gold camp. The combined financial strength and asset
portfolio gives us the capital to move into a new stage of growth
in a rising gold market. I look forward to working closely with the
management team and shareholders, to help the company gain the
recognition it deserves.”
Frank Giustra, Blackwolf’s largest
shareholder and expected largest shareholder of the combined
company, stated: “This is a strong transaction for
Blackwolf and Treasury shareholders that puts the company on the
path of a buy and build strategy that I have implemented many
times. We see the GGC Project as buildable and expandable on a
district scale. I look forward to continuing to be a supportive
shareholder and am excited to join the team as a Strategic
Advisor.”
Transaction Terms
Pursuant to the terms and conditions of the
Agreement, the holders of the issued and outstanding shares of
Blackwolf will receive 0.607 of a Treasury share for each one
Blackwolf share held (the “Exchange Ratio”).
Blackwolf options that are outstanding at the time of completion of
the Transaction shall be exchanged for fully vested replacement
options exercisable to acquire Treasury shares as adjusted to
reflect the Exchange Ratio on substantially the same terms and
conditions, and outstanding warrants of Blackwolf will become
exercisable, based on the Exchange Ratio, to purchase Treasury
shares on substantially the same terms and conditions. The
Transaction will be completed pursuant to a court-approved plan of
arrangement under the Business Corporations Act (British Columbia).
The Transaction will require approval of at least: (i) 66⅔% of the
votes cast by Blackwolf shareholders; (ii) 66⅔% of the votes cast
by Blackwolf shareholders and option holders, voting as a single
class; and (iii) a simple majority of the votes cast by Blackwolf
shareholders, excluding the votes cast by certain persons in
accordance with Multilateral Instrument 61-101 Protection of
Minority Security Holders in Special Transactions. The issuance of
shares by Treasury as consideration pursuant to the Transaction is
also subject to approval by at least a majority of the votes cast
by Treasury shareholders in accordance with TSX requirements. In
addition to securityholder and court approvals, the Transaction is
subject to applicable regulatory approvals including the TSX and
TSX Venture approvals, the completion of the concurrent financing
and the satisfaction of certain other closing conditions customary
in transactions of this nature.
Senior officers and directors of Blackwolf,
along with Frank Giustra, collectively holding approximately 19.13%
of the Blackwolf shares outstanding, have entered into voting
support agreements pursuant to which they have agreed, among other
things, to vote their Blackwolf shares and options in favour of the
Transaction. Senior officers and directors of Treasury and certain
shareholders collectively holding approximately 37.03% of the
Treasury shares outstanding, have entered into voting support
agreements pursuant to which they have agreed, among other things,
to vote their Treasury shares in favour of the Transaction.
The Agreement contains customary reciprocal
deal-protection provisions including non-solicitation covenants and
a right to match any superior proposal as defined in the Agreement.
Under certain circumstances, Treasury or Blackwolf would be
entitled to a termination fee of C$500,000.
Complete details of the Transaction will be
included in management information circulars to be delivered to
both Treasury and Blackwolf securityholders in the coming weeks. It
is anticipated that closing of the Transaction, subject to
satisfying all necessary conditions and receipt of all required
approvals, will take place in Q3 2024.
None of the securities to be issued pursuant to
the Transaction have been or will be registered under the United
States Securities Act of 1933, as amended (the “U.S.
Securities Act”), or any state securities laws, and any
securities issuable in the Transaction are anticipated to be issued
in reliance upon available exemptions from such registration
requirements pursuant to Section 3(a)(10) of the U.S. Securities
Act and applicable exemptions under state securities laws. This
news release does not constitute an offer to sell or the
solicitation of an offer to buy any securities.
Concurrent Financing
In connection with the Transaction, Treasury
proposes to complete a non-brokered private placement consisting of
a minimum of approximately 17,391,304 flow-through units
(“FT Units”) in the capital of Treasury at a price
of $0.23 per FT Unit for aggregate gross proceeds of a minimum of
$4 million (the “Concurrent Financing”). Each FT
Unit will consist of one common share that will be issued as
“flow-through shares” within the meaning of the Income Tax Act
(Canada) (an “FT Share”) and one common share
purchase warrant (a “Warrant”) of Treasury. Each
Warrant will be exercisable at a price of $0.35 for a period of 36
months following the closing of the Concurrent Financing. Frank
Giustra will be the lead subscriber to the Concurrent Financing and
will be a significant shareholder post closing of the
Transaction.
It is expected that the gross proceeds from the
sale of the FT Shares will be used by the Company to incur eligible
“Canadian exploration expenses” that will qualify as “flow-through
mining expenditures” (as such terms are defined in the Income Tax
Act (Canada)) and “eligible Ontario exploration expenditures” as
defined in subsection 103(4) of the Taxation Act, 2007 (Ontario)
(the “Qualifying Expenditures”) related to
Treasury’s Ontario mineral projects. All Qualifying Expenditures
will be renounced in favour of the subscribers of the FT Shares
effective no later than December 31, 2024.
The proceeds of the Concurrent Financing will be
used to advance the GGC Project and select exploration programs
across the exploration portfolio of Treasury.
The Concurrent Financing is being conducted in
all of the provinces and territories of Canada pursuant to
applicable prospectus exemptions. Completion of the Concurrent
Financing is subject to obtaining the required TSX approvals and
satisfaction of customary closing conditions. The FT Shares and
Warrants to be issued in connection with the Concurrent Financing,
will be subject to a statutory four-month and one day hold period
from the closing date.
The securities to be offered in the Concurrent
Financing have not been, and will not be, registered under the U.S.
Securities Act or any U.S. state securities laws, and may not be
offered or sold in the United States or to, or for the account or
benefit of, United States persons absent registration or any
applicable exemption from the registration requirements of the U.S.
Securities Act and applicable U.S. state securities laws. This news
release shall not constitute an offer to sell or the solicitation
of an offer to buy securities in the United States, nor shall there
be any sale of these securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful.
Amendment to Sprott Royalty
Agreement
Sprott Resources Streaming and Royalty Corp
(“Sprott Streaming”) and Treasury have agreed to
modify the terms of the agreement dated April 11, 2022, whereby
Sprott Streaming will forego receiving the quarterly minimum
payments under the terms of the agreement for the next four
quarterly payments. In exchange, the quarterly minimum payment will
increase to US$675,000 and the last date of payment will be the
earlier of the declaration of commercial production, or January 11,
2028. Previously, the terms were for minimum payments of US$500,000
on a quarterly basis to the earlier of commercial production, or
December 31, 2027.
Board of Directors & Management of
Combined Company
The combined company’s board of directors (the
“New Board”) will be led by Jim Gowans as Chair and will be
comprised of five board members nominated by Treasury and four
board members nominated by Blackwolf.
Reporting to the New Board, the combined company
will be managed by Jeremy Wyeth as CEO & Director, Morgan
Lekstrom as President & Director, and Orin Baranowsky as Chief
Financial Officer.
Mr. Wyeth, President and Chief Executive Officer
of Treasury since December 2020, was previously Operations Director
at Wood Canada Ltd. and an operational executive of De Beers, where
he led the development, construction, commissioning and ramp-up of
the Victor Diamond Mine in Northern Ontario. He has held various
senior management positions, including with Excellon Resources and
Anglo American, and served on the boards of Vector Resources Inc.,
DRA Americas Inc., DRA Brazil and the Ontario Mining Association
and is a member of the Board of Treasury.
Mr. Lekstrom, CEO and Director of BWCG
since June 2023, has over 17 years of mining and industry
experience in progressively senior roles from executive management,
project management, operations, and engineering management. Most
recently, he was President & CEO of Silver Hammer Mining Corp.
and a co-founder of a publicly-traded uranium company. Mr. Lekstrom
has an established track record of delivering successes across
numerous projects, capital raises and defining of strategic
direction for multiple companies. He had senior technical roles at
Freeport McMoran’s Grasberg site in Indonesia and Rio Tinto’s Oyu
Tolgoi Project in Mongolia, and he co-led the design, construction
and commissioning of a new steel grinding media plant for Arrium
(Moly-corp) in Canada and Peru. He played an integral role in the
development and revival of Golden Star Resources’ Prestea
underground mine in Ghana, West Africa.
Mr. Baranowsky, Chief Financial Officer of
Treasury since March 2021, has more than 25 years of finance and
capital markets experience. Previously, he was the Chief Financial
Officer for Blue Thunder Mining Inc. and Chief Financial Officer of
Stornoway Diamond Corporation, where he was instrumental in helping
raise more than $1 billion for the construction of the Renard
Diamond Mine in northern Québec. He holds an Honours Bachelor of
Business Administration degree from Wilfrid Laurier University, is
a member of the Chartered Professional Accountants of Ontario and
is a CFA Charterholder.
Proposed Consolidation
The combined company also intends to complete a
consolidation of its outstanding shares on the basis of one
post-consolidation share for every four pre-consolidation shares
following the completion of the Transaction and Concurrent
Financing.
Recommendations by the Board of
Directors and Fairness Opinions
The Agreement has been unanimously approved by
the Board of Directors of each of Treasury and Blackwolf after
consultation with their respective financial and legal advisors and
receipt of the unanimous recommendation from their respective
special committee of Board of Directors. Both Boards of Directors
unanimously recommend that their respective securityholders vote in
favour of the Transaction.
The Board of Directors of Treasury has received
a fairness opinion from RwE Growth Partners, Inc. to the effect
that, based upon and subject to the assumptions, limitations, and
qualifications stated in such opinion, the consideration to be paid
by Treasury pursuant to the Transaction is fair, from a financial
point of view, to Treasury.
The Board of Directors of Blackwolf has received
a fairness opinion from Evans & Evans, Inc. to the effect that,
based upon and subject to the assumptions, limitations, and
qualifications stated in such opinion, the consideration to be
received by Blackwolf shareholders pursuant to the Transaction is
fair, from a financial point of view, to Blackwolf
shareholders.
Advisors and Counsel
Haywood Securities Inc. is acting as financial
advisor to Treasury. Cassels Brock & Blackwell LLP is acting as
Treasury’s legal counsel.
DuMoulin Black LLP is acting as legal counsel to
Blackwolf and Fiore Management and Advisory Corp. has acted as
advisor to Blackwolf in connection with the Transaction and will
receive a 2% advisory fee payable in shares. Evans & Evans
provided a fairness opinion to Blackwolf’s Special Committee and
Board of Directors that the Transaction is fair from a financial
point of view to the shareholders of Blackwolf subject to the
assumptions, limitations and qualifications set out in such
fairness opinion.
For more information about Blackwolf and TML,
please refer to each company’s profile on SEDAR+ at
www.sedarplus.ca
Niblack Camp Purchase
Agreement
Blackwolf announces it has entered into a
purchase and sale agreement (the “Purchase and Sale
Agreement”) with Matrix Camps and Logistics, Inc.
(“Matrix”) and Niblack Project LLC
(“Niblack”), the Company’s wholly owned
subsidiary. Pursuant to the Purchase and Sale Agreement, the
parties agrees to release each other from all prior claims under
the camp support and rental agreed dated July 20, 2021 between
Matrix and Niblack (the “Prior Agreement”) and
Niblack shall purchase the camp assets at the Company’s Niblack
project from Matrix Aviation Solutions Inc. in exchange for (i)
Matrix retaining a US$100,000 deposit paid to Matrix pursuant to
the Prior Agreement; and (ii) issuing to Matrix 9,300,000 Blackwolf
shares. The Company has also agreed to grant to Matrix a three year
exclusivity right to provide camp services at the Company’s Niblack
project, provided that such services are provided at market rates.
In addition to the statutory hold period, 50% the Blackwolf shares
issued to Matrix pursuant to the Purchase and Sale Agreement shall
be subject to a contractual resale restriction and shall not be
sold or otherwise disposed of for a period of one (1) year
following the issuance of such Blackwolf shares. The Purchase and
Sale Agreement and the issuance of Blackwolf shares to Matrix
remain subject to TSXV approval.
Niblack Teck Agreement
Blackwolf’s Niblack Copper-Gold project was
acquired pursuant to an option agreement (the “Niblack
Option Agreement”) with Teck Resources Limited and Teck
Co, LLC (together, “Teck”) dated August 15, 2006,
as amended on January 18, 2012. Pursuant to the Niblack Option
Agreement, Blackwolf is obligated to pay $1,250,000 in cash to Teck
upon certain change of control and other events. Blackwolf and Teck
have entered into an addendum to the Niblack Option Agreement to
permit Blackwolf to satisfy this payment by issuing to Teck,
immediately prior to closing of the Transaction, the number of
Blackwolf shares that is calculated by dividing $1,250,000 by
the 20-day volume-weighted average price (VWAP) of the
Blackwolf shares on the TSXV following the date of this release,
subject to TSXV approval. The addendum automatically terminates if
the Transaction is terminated.
Termination of Harry Option
Agreement
Following the most recent exploration work on
the Harry Property, Blackwolf has opted to not continue with the
required payment to maintain the option and as a result the Harry
Property Option Agreement has been terminated.
Technical Disclosure and Qualified
Persons
Adam Larsen, B.Sc., P. Geo., Director of
Exploration of Treasury, is a “qualified person” within the meaning
of National Instrument 43-101 Standards of Disclosure for Mineral
Projects (“NI 43-101”) and has reviewed and approved the scientific
and technical information in this news release on behalf of
Treasury. Mr. Larsen has verified the data disclosed in this news
release and no limitations were imposed on his verifications
process.
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. For information on the Goliath Gold
Complex, please refer to the technical report, prepared in
accordance with NI 43–101, entitled “Goliath Gold Complex –
NI 43–101 Technical Report and Prefeasibility Study” and dated
March 27, 2023 with an effective date of February 22, 2023, led by
independent consultants Ausenco Engineering Canada Inc. The
technical report is available on SEDAR+ at www.sedarplus.ca, on the
OTCQX at www.otcmarkets.com and on the Company website at
www.treasurymetals.com.
The Company also owns several other projects
throughout Canada, including the Weebigee-Sandy Lake Gold Project
JV, and grassroots gold exploration property Gold Rock. Treasury 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 further
details about Treasury, please visit the Company’s website at
www.treasurymetals.com.
About Blackwolf Copper and Gold
Ltd.
Blackwolf’s founding vision is to be an industry
leader in transparency, inclusion, and innovation. Guided by our
Vision and through collaboration with local and Indigenous
communities and stakeholders, Blackwolf builds shareholder value
through our technical expertise in mineral exploration, engineering
and permitting. The Company holds a 100% interest in the high-grade
Niblack copper-gold-zinc-silver VMS project, located adjacent to
tidewater in southeast Alaska. In addition, the Company holds a
100% interest in five Hyder Area gold-silver and base metal
properties in southeast Alaska. For more information on Blackwolf,
please visit the Company’s website at
www.blackwolfcopperandgold.com.
Contact:
Jeremy WyethPresident & CEOTreasury Metals Inc.T: +1
416-214-4654;Email: ir@treasurymetals.comMorgan LekstromCEO &
DirectorBlackwolf Copper & Gold Ltd.T: +1 604-609-6132;C: 250
574 7350Email: info@bwcg.ca |
Orin BaranowskyCFO |
|
|
Cautionary Note Regarding
Forward-Looking Information
This news release includes certain
“forward-looking information” and “forward-looking statements”
(collectively, “forward-looking statements”) within the meaning of
Canadian and United States securities legislation that is based on
expectations, estimates, projections and interpretations as at the
date of this news release. Any statement that involves predictions,
expectations, interpretations, beliefs, plans, projections,
objectives, assumptions, future events or performance (often, but
not always, using phrases such as “expects”, or “does not expect”,
“is expected”, “interpreted”, “management’s view”, “anticipates” or
“does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”,
“estimates”, “potential”, “feasibility”, “believes” or “intends” or
variations of such words and phrases or stating that certain
actions, events or results “may” or “could”, “would”, “might” or
“will” be taken to occur or be achieved) are not statements of
historical fact and may be forward-looking information and are
intended to identify forward-looking information.
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, expected timing and
completion of the Transaction; the strengths, characteristics and
expected benefits and synergies of the Transaction; receipt of
court approval; approval of the Transaction by Blackwolf
securityholders and Treasury shareholders; obtaining TSX and TSXV
acceptance to complete the Transaction; the anticipated timing of
the securityholder meetings of Treasury and Blackwolf to vote on
the Transaction and the related management information circular;
the expected delisting of Blackwolf shares from the TSXV; the
composition of the post-Transaction board and management team of
the combined company; completion of the proposed consolidation;
expectations regarding the potential benefits and synergies of the
Transaction and the ability of the combined company to successfully
achieve business objectives, including integrating the companies or
the effects of unexpected costs, liabilities or delays; obtaining
TSXV acceptance to issue Blackwolf shares to Teck and Matrix
Aviation Solutions Inc.; completion of the purchase of the camp
assets from Matrix; expectations relating to future exploration,
development and production activities; expectations relating to
costs; expectations regarding financial strength, free cash flow
generation, trading liquidity, and capital markets profile;
expectations regarding future exploration and development, growth
potential for Treasury’s and Blackwolf’s operations; availability
of the exemption under Section 3(a)(10) of the U.S. Securities Act
to the securities issuable in the Transaction; the companies’
assessments of, and expectations for, future business activities
and operating performance; expectations regarding the completion of
the Concurrent Financing on substantially the same terms set out
herein or at all, exploration and production for precious metals;
delays or changes in plans with respect to exploration or
development projects or capital expenditures; the uncertainty of
mineral resource, production and cost 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.
Cautionary Note to United States
Investors
Each of Treasury and Blackwolf is subject to the
reporting requirements of applicable Canadian securities laws, and
as a result, reports information regarding mineral properties,
mineralization and estimates of Mineral Reserves and Mineral
Resources in accordance with Canadian reporting requirements, which
are governed by NI 43-101. As such, the information included in
this news release concerning mineral properties, mineralization and
estimates of Mineral Reserves and Mineral Resources may not be
comparable to similar information disclosed by U.S. public
companies subject to the reporting and disclosure requirements of
U.S. regulators. Historical results or prefeasibility models
presented herein are not guarantees or expectations of future
performance.
1 Cash cost and AISC are non-GAAP financial
measures and have no standardized meaning under International
Financial Reporting Standards (“IFRS”) and may not be comparable to
similar measures used by other issuers. As the GGC Project is not
in production, TML does not have historical non-GAAP financial
measures nor historical comparable measures under IFRS, and
therefore the foregoing prospective non-GAAP financial measures may
not be reconciled to the nearest comparable measures under IFRS.
See “Non-IFRS Measures” in Treasury’s management’s discussion and
analysis for the year ended December 31, 2023 for further
details.
Treasury Metals (TSX:TML)
Historical Stock Chart
From Jul 2024 to Aug 2024
Treasury Metals (TSX:TML)
Historical Stock Chart
From Aug 2023 to Aug 2024