Treasury Metals has struck a $20-million royalty deal with mine financier Sprott Resource Streaming and Royalty Corp to move the project yardsticks for a large proposed gold mine, east of Dryden.
The financing will be earmarked for economic studies, permitting, consultations and corporate administrative costs; all the things Treasury needs to do to take the project through to construction.
Treasury has not yet made a construction decision for a mine project that has an initial operational life of 13 years that will likely lengthen out as ongoing exploration continues to discover more gold on its 330-square-kilometre property between Dryden and Sioux Lookout.
The Goliath Gold Complex consists of the flagship Goliath deposit and two outlying deposits, Goldlund and Miller, acquired from First Mining Gold in a transaction made in 2020. The Goliath deposit has both open pit and underground mine potential.
A net smelter returns royalty is calculated on the proceeds of the sale of a mineral product to a processing facility. Mining companies issue royalties as an attractive method of financing projects.
Under the terms of the agreement, Sprott will receive 2.2 per cent net smelter returns revenue covering all the minerals produced from Treasury's proposed Goliath Gold Complex for the operating life of the project.
The deal closes at the end of March.
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Treasury president-CEO Jeremy Wyeth is pleased to have Sprott aboard as a partner.
"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," said Wyeth in a news release.
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, Sprott's managing partner, said Treasury has been in their sights for quite some time.
"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 (Goliath Gold Complex) 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."
