Treasury Metals To Acquire Frank Giustra’s Blackwolf Copper and Gold
Canadian mining giant Frank Giustra is set to take a major stake in another near-term gold producer. Treasury Metals (TSX: TML) this morning declared that it will be acquiring Giustra’s Blackwolf Copper and Gold (TSXV: BWCG) in an effort to create what it calls a “new growth-focused North American gold platform.”
The transaction will see the two companies combine in an effort to advance Treasury Metals’ Goliath Gold Complex project towards production, with the backing of a strengthened leadership, balance sheet and capital markets team.
The Goliath Gold Project, as per a prefeasibility study released last year, has a net present value (5% discount) of $493 million based on US$1,950 gold, and is expected to product 109,000 ounces of gold per year at an all-in sustaining cost of US$1,037 over a proposed 13 year mine life.
The transaction is expected to result in a strengthened balance sheet for Treasury, with cash expected to climb to more than $10 million, which will be further bolstered by a $4.0 million flow through financing that is to be completed as part of the deal. That financing is set to occur at $0.23 per flow through unit, with each unit containing common share and one common share purchase warrant with an exercise price of $0.35 and an expiry of three years. The cash position is expected to be used to intensify exploration efforts at the Goliath Gold complex, with a focus on expanding the current resource area, while pursuing a strategic acquisition strategy in the region.
The proposed deal would see Blackwolf shareholders receive 0.607 of a share of Treasury for each share held, resulting Blackwolf shareholders owning a 31.7% stake in the resulting company. Based on yesterday’s closing price, the figure equates to approximately $0.12 per share for Blackwolf shareholders, valuing the explorer at roughly $14.9 million.
Giustra meanwhile is set to become a cornerstone investor in Treasury, based on his current 13.00% ownership stake in Blackwolf. It is expected that he will lead an enhanced capital markets focus in an effort to create value for shareholders.
“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. 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,” commented Giustra.
The resulting management team meanwhile is set to see Jeremy Wyeth remain in the CEO position for Treasury Metals, while Morgan Lekstrom, CEO of Blackwolf, will take on the role of President.
The transaction remains subject to Blackwolf shareholder approval, as well as customary regulatory approvals. The transaction is slated to close in the third quarter of 2024.
The company is expected to complete a four to one share consolidation upon the closing of the transaction.
Treasury Metals last traded at $0.20 on the TSX.
Information for this story was found via Sedar and the companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.
