Treasury Metals closes $11.52M private placement

2020-07-07 15:44 ET – News Release

Mr. Greg Ferron reports

TREASURY METALS CLOSES OVER-SUBSCRIBED $11.5 MILLION BOUGHT DEAL FINANCING

Treasury Metals Inc. has closed an $11.52-million bought deal private placement of 32 million subscription receipts at a price of 36 cents per subscription receipt. The Offering was led by Haywood Securities Inc., and included PI Financial Corp., Sprott Capital Partners LP, and Canaccord Genuity Corp. (collectively, the “Underwriters”).

Greg Ferron, CEO of Treasury, stated: “Completion of this financing comes at a transformational time for shareholders as we positively integrate the Goldlund gold project into our development timeline. The proceeds from the financing will fund the completion of a combined Goliath-Goldlund economic study expected within 2020, advance key engineering and environmental baseline data on Goldlund, and complete 25,000 metres of infill and expansion drilling program on the combined projects.”

The Offering was completed in connection with the Company’s previously announced transaction (the Transaction”) wherein Treasury will acquire all of the outstanding common shares of Tamaka Gold Corporation, a wholly owned subsidiary of First Mining Gold Corp., which holds a 100% interest in the Goldlund Gold Project (“Goldlund”), located immediately adjacent to Treasury’s Goliath Gold Project (“Goliath”) in Northwestern Ontario. Please refer to the Company’s press release dated June 3, 2020 for further information regarding the Transaction. It is currently anticipated that the Transaction will close in early August.

The Subscription Receipts were issued pursuant to a subscription receipt agreement (the “Subscription Receipt Agreement”) entered into by the Company, the Underwriters, and TSX Trust Company as subscription receipt agent. Pursuant to the Subscription Receipt Agreement, the gross proceeds from the Offering (less 50% of the Underwriters’ cash commission and all of the Underwriters’ expenses) (the “Escrowed Funds”) will be held in escrow pending satisfaction of certain conditions, including, amongst others, (a) the satisfaction or waiver of each of the conditions precedent to the Transaction; and (b) the receipt of all required shareholder and regulatory approvals in connection with the Transaction and the Offering (“Escrow Release Conditions”). If the Escrow Release Conditions have not been satisfied on or prior to the date that is 90 days after the closing date of the Offering, the holders of Subscription Receipts will receive a cash amount equal to the Issue Price of the Subscription Receipts and any interest that has been earned on the Escrowed Funds.

The Company has agreed to use its commercially reasonable efforts to obtain a receipt from the Ontario Securities Commission (the “OSC”) on behalf of the applicable provincial securities regulatory authorities (the “Securities Commissions”) for a (final) prospectus (the “Qualifying Prospectus”) qualifying the distribution of the common shares of the Company (“Common Shares”) and Warrants (as defined herein) underlying the units issuable upon conversion of the Subscription Receipts and the Underwriters’ compensation options (“Compensation Options”) issuable upon conversion of the Underwriters’ compensation option receipts (the “Compensation Option Receipts”) by 5:00 p.m. (Toronto time) on August 18, 2020 (the “Qualification Deadline”).

Pursuant to the terms of the Subscription Receipt Agreement, each Subscription Receipt shall automatically convert into one unit (a “Unit”) or one Penalty Unit (as defined below), as applicable, for no additional consideration, upon the later of (the “Automatic Conversion Date”):

the date when the Escrowed Funds are released; and

the date which is the earlier of:

four months and one day after the closing of the Offering; and

the second business day following the filing of the Qualifying Prospectus.

Each Unit will be comprised of one Common Share plus one-half of one Common Share purchase warrant (each whole such purchase warrant, a “Warrant”), with each Warrant entitling the holder thereof to acquire one Common Share at a price of $0.60 for a period of 24 months from the Automatic Conversion Date (the “Expiry Date”). If, after the Automatic Conversion Date and before the Expiry Date, the closing price of the Common Shares on the Toronto Stock Exchange (“TSX”) is equal to or greater than $1.00 per Common Share for a period of twenty (20) consecutive trading days during the exercise period, the Company may elect to accelerate the expiry date of the Warrants to a date that is not less than 30 calendar days from the date when written notice is delivered to the Warrant holders.

In the event the Company has not received a receipt from the OSC on behalf of the Securities Commissions for the Qualifying Prospectus before the Qualification Deadline, each Subscription Receipt will thereafter entitle the holder to receive upon the conversion thereof, for no additional consideration, one penalty unit (a “Penalty Unit”), each Penalty Unit to be comprised of 1.1 Common Shares and 0.55 of a Warrant.

The net proceeds of the Offering will be used for the exploration and development of the Goliath and Goldlund projects, and for general corporate purposes.

The Offering constituted a related party transaction within the meaning of Multilateral Instrument 61-101 (“MI 61-101”) as an insider of the Company subscribed for an aggregate of 90,000 Subscription Receipts. The Company is relying on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101, as the fair market value of the participation in the Offering by insiders does not exceed 25% of the market capitalization of the Company, as determined in accordance with MI 61-101. The participants in the Offering and the extent of such participation were not finalized until shortly prior to the completion of the Offering. Accordingly, the Company was not able to publicly disclose details of the nature and extent of related party participation in the Offering pursuant to a material change report filed at least 21 days prior to the completion of the Offering.

The Subscription Receipts issued under the Offering were offered by way of private placement exemptions in all the provinces of Canada except Quebec and in the United States on a private placement basis pursuant to exemptions from the registration requirements of the United States Securities Act of 1933, as amended. The Subscription Receipts, Compensation Option Receipts and the Common Shares and Warrants underlying the Subscription Receipts and the Compensation Options underlying the Compensation Option Receipts are subject to a statutory four-month hold period in accordance with Canadian securities legislation, subject to qualification of the Warrants, Common Shares and Compensation Options under the Qualifying Prospectus.

The Offering was conditionally approved by the TSX on July 6, 2020. Closing of the Transaction remains subject to certain regulatory approvals including approval of the TSX and the shareholders of Treasury.

To view further details about the Transaction and the Goliath and Goldlund projects, please visit the Company’s website at http://www.treasurymetals.com.

The securities referred to in this news release have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. This news release does not constitute an offer for sale of securities, nor a solicitation for offers to buy any securities. Any public offering of securities in the United States must be made by means of a prospectus containing detailed information about the company and management, as well as financial statements.

About Treasury Metals Inc.

Treasury Metals Inc. is a gold focused company with assets in Canada and is listed on the TSX under the symbol “TML” and on the OTCQXtrademark Best Market under the symbol TSRMF. Treasury’s flagship Goliath Gold Project is located in Northwestern Ontario. The project benefits substantially from excellent access to the Trans-Canada Highway, related power and rail infrastructure, and close proximity to several communities including Dryden, Ontario. Treasury plans on the initial development of an open pit gold mine with subsequent underground operations. The Company also owns several other projects throughout Canada, including Lara Polymetallic Project, Weebigee Gold Project, and grassroots gold exploration properties Gold Rock/Thunder Cloud and Shining Tree properties.

We seek Safe Harbor.

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