Treasury Metals to buy Blackwolf Copper and Gold

Treasury Metals, a Canadian explorer, announced it is acquitting Blackwolf Copper and Gold, an explorer backed by Frank Giustra, to advance the Goliath Gold Complex in Ontario, Canada, towards production.

Under the agreement, each Blackwolf share will be exchanged for 0.607 of a Treasury Metals share, resulting in existing Treasury Metals and Blackwolf shareholders owning around 68.3% and 31.7% of Treasury, respectively.

Treasury's shares are up 17.5% on the previous session at C$0.24. It has a market cap of C$43.96 million. Blackwolf shares are trading at C$0.12 with a market cap of C$15.38 million.

GGC project development

The Goliath Gold Complex is forecasted to produce 109,000ozpa at a cash cost of US$892/oz and an all-in sustaining cost of $1037/oz during the first 9 years of the projected 13-year mine life. The project has a net present value of $493 million at a 5% discount rate and internal rate of return of 33.5% based on a gold price of US$1,950/oz.

In addition to advancing the project, Treasury Metals notes strengthened leadership, balance sheet, and capital market team behind the merger. According to Treasury, the balance sheet will be fortified with a combined cash position of over C$10 million and a proposed concurrent minimum of C$4 million flow-through financing.

Canadian mining financier Frank Giustra will lead the new capital markets strategy, the explorer said.

"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," Treasury chief executive Jeremy Wyeth said.

"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," Giustra added. "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."