Treasury Metals arranges $6-million facility with RMB

Nov 15, 2013

TREASURY METALS ANNOUNCES FINANCING WITH RMB RESOURCES INC.

Treasury Metals Inc. has entered into an mandate with and subsequently received in-principle approval from RMB Resources Inc., to arrange and provide a $6-million feasibility finance facility by the lender, RMB Australia Holdings Ltd.

RMB is the resource merchant banking division of the FirstRand Group. Concurrent to the RMB financing, the company will undertake to complete a private placement of common shares for $2.5-million. The combined financing will provide sufficient capital to finance the remaining technical program required to complete a bankable feasibility study and the mine permitting for Treasury’s flagship Goliath gold project, located in Northwestern Ontario.

“We are pleased to add RMB Resource, a strong partner with a wealth of mining knowledge and experience, to the Goliath gold project,” stated Martin Walter, Treasury’s president and chief executive officer. “This financing is a further endorsement of the project and reduces financing risk for our shareholders. The transaction provides Treasury with the necessary financial resources to accelerate and complete the important feasibility study stage, an exciting time as we transition towards becoming one of Canada’s next gold producers.”

Key terms of the facility are as follows:

$6-million secured, medium term facility of which an initial $3-million will be available on closing and a second tranche of $3-million will be available upon completion of specified project milestones;
A facility term of 2.5 years at Canadian dealer offered rate plus 7.5 per cent per annum;
Prepayment at any time without penalty;
1.5 million financier warrants, to be issued on the closing date, which will entitle RMB, for a period of 3.5 years, to purchase a common share of Treasury at an exercise price equal to a 15-per-cent premium to the 20-day volume-weighted average price (VWAP) on the closing date capped at 55 cents per share. A second set of 1.5 million financing warrants will be issued at the drawdown of the second $3-million of the facility. These warrants will be priced at 15-per-cent premium at the time of the drawdown notice up to an exercise price of 80 cents, at which point the exercise price will be calculated using 0-per-cent premium over the 20-day VWAP.

The facility is expected to close by the end of December, 2013, and is subject to customary conditions and documentation including completion of the equity component of the financing. The issue of the financier warrants and private placement is subject to all necessary regulatory approvals including the Toronto Stock Exchange. Additional details of the private placement will be provided in due course.

Treasury Metals continues to advance mine permitting, technical engineering and environmental programs in conjunction with a feasibility study of the Goliath gold project (see operational update press release dated Oct. 23, 2013, for further details).

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