08:51 AM EDT, 05/02/2024 (MT Newswires) -- Treasury Metals Inc. ( TSRMF ) and Blackwolf Copper and Gold Ltd. ( BWCGF ) entered Thursday into a definitive arrangement agreement dated May 1, 2024 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 combined company's Niblack Copper-Gold development project in Alaska and other exploration properties "also represent promising upside projects for future growth", according to a statement.

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.

Jeremy Wyeth, President & CEO of Treasury, and expected CEO of the combined company, said in the statement: "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."

Frank Giustra, Blackwolf's largest shareholder and expected largest shareholder of the combined company, added: "This is a strong transaction for Blackwolf and Treasury shareholders that puts the company on the path of a buy and build strategy.... We see the GGC Project as buildable and expandable on a district scale."

Among transaction highlights, 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. And on potential near-term gold production, based on a pre-feasibility study conducted in Feb. 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 cost of US$892 per ounce and an All-in Sustaining Cost (AISC) of US$1,037 per ounce during the first nine years.

The pre-feasibility 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. Thursday's statement said: "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."