Canadian mineral exploration company Treasury Metals has reached a deal to buy compatriot Blackwolf Copper and Gold (BWCG), owner of the Niblack project in Alaska.
The merger of these two businesses is expected to help advance Treasury’s Goliath Gold Complex (GGC) Project in Ontario towards production.
The GGC Project, along with the Niblack Copper-Gold development project and other exploration properties, represents significant upside potential for the newly merged company.
Under the agreed terms, Treasury will acquire all issued and outstanding shares of Blackwolf, with each Blackwolf share being swapped for 0.607 of a Treasury share.
Post-merger, Treasury and Blackwolf shareholders will own around 68.3% and 31.7% of the merged entity, respectively.
To enhance financial flexibility, Treasury has revised its agreement with Sprott Resources Streaming and Royalty, deferring quarterly minimum payments for the next four quarters.
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In return, these payments will increase from $500,000 to $675,000, with an advanced deadline for the last payment.
The merger is contingent upon shareholder approval from Blackwolf, with key investor Frank Giustra and other senior officers expected to endorse the deal.
This merger aims to propel the GGC project, located within the Wabigoon greenstone belt, towards production, leveraging a strengthened cash balance of C$10m ($7.32m) and a new capital markets strategy.
The project includes an open-pit and underground gold mine with a milling facility, which received federal environmental approval in 2019.
The final feasibility study and permitting processes are currently in progress.
In addition to GGC, Treasury aims to develop the Niblack project, acquired by Blackwolf through an option agreement with Teck Resources in 2006.
Concurrently with the merger, Treasury plans a private placement of nearly 17.4 million units priced at C$0.23 each to raise C$4m.
Each unit will include a common share and one warrant exercisable at C$0.35, with proceeds intended to advance the GGC project and select exploration programmes.
Treasury president and CEO Jeremy Wyeth 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.”
Wyeth is expected to take the reins of the combined company as its CEO, while Blackwolf CEO Morgan Lekstrom is expected to assume the role of president.
