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."