Treasury Metals (TML) - Mine Builders Bring Real Belief to Project

Treasury Metals Inc. is a gold-focused exploration and development company with assets in Canada and is listed on the Toronto Stock Exchange under the symbol “TML” and on the OTCQX® Best Market under the symbol TSRMF. Treasury Metals Inc.’s 100% owned Goliath Gold Complex in northwestern Ontario has received federal government permission to proceed on final authorizations and permits, following successful completion of the environmental assessment process. Goliath Gold Complex is set to become one of Canada’s next producing gold mines.

We spoke with Jeremy Wyeth, President and CEO of Treasury Metals. He has an exciting story to tell about the Goliath Gold Project in Northwestern Ontario, Canada that really hasn't made the market it deserves quite yet he said. It has great potential, he tells us, and shared how Treasury Metals can take this opportunity forward.

Overview of Treasury Metals                                                                                       

Treasury Metals Inc. is a Canadian gold exploration and development company focused on its 100% owned Goliath Gold Project. The Project has access to first-rate infrastructure and is located near Dryden in northwestern Ontario. Treasury Metals is advancing Goliath through the Canadian permitting process for mining production at its open-pit gold mine and 2,500 tpd processing facility. 

In addition, Treasury Metals is involved with the Goldlund Mine Project, the Miller Mine Project, and several other exploratory interests in Ontario and elsewhere in Canada.

Management at Treasury Metals

In addition to Wyeth, the company management and direction is composed of Orin Baranowsky, CFO; Clinton Swemmer, Vice President Projects; Rachel Pineault, Vice President Human Resources; Mark Wheeler, Project Director; Maura Kolb, Exploration Director; Adam Larsen, Exploration Manager; and Mackenzie Denyes, Manager of Regulatory Affairs. 

Goliath Gold

The Goliath Gold Project, consisting of both a mine and a mill, is 20 km east of Dryden in northwestern Ontario. The resource present is currently described as 1,229,800 ounces Au Eq. Measured and Indicated and 226,700 ounces Au Eq. Inferred. Treasury Metals has released an updated Preliminary Economic Assessment (PEA) that outlines a plan to process gold ore at the project site.

A History of Underperformance

We got right into a big concern indicating that Treasury Metals has had a long history of underperformance. We asked him to comment on that.  

He agreed, saying that there have been a lot of puzzle pieces that have needed to come together. It’s only during the last nine months that they got to a point where they have the critical mass to systematically and prudently build a mine.

Jeremy Wyeth’s Role

Wyeth’s role, he told us, was to come in, bring in a superior-quality team, and really under-promise and over-deliver. Since he joined the company in December of 2020 he has brought in four strategic hires. They now have a CFO for the first time, Orin Baranowsky. They have brought in Clinton Swemmer as VP of Projects as well. Both of those individuals have more than 20-years' experience in the industry. Baranowsky has raised money, built mines and, then been the CFO for an operating mine. Swemmer has largely done the same; he has 20-years of doing technical studies for clients building mines. Wyeth himself has 35-years in the industry, 25 of which were with De Beers and Anglo American.

They have also added Maura Kolb to their team, from the Northwestern Ontario region, as Director of Exploration. She brings about 10-years of really good experience in our region. And just recently they have added Rachel Pineault as VP of Human Resources and Community Engagement. She has 25 years of experience in Ontario.

What Needs To Be Fixed at Treasury?

We asked Wyeth what he needs to do now. How is Treasury Metal going to make a good turnaround, we asked?

They produced a PEA in February 2021 that met with some market resistance, he re-lied. The market was expecting a bigger resource and a quicker timeline, he added. As far as resource size, they took a probabilistic and statistical approach that was quite conservative.  They have identified some areas that need a 60,000 m drill program. This is one-third the size of the total program drilled over the last thirteen years at the asset, so it’s a big deal because it will build continuity and resource, he said.  They want to take that first criticism of the resource not being big enough and transform it by targeted drilling. By doing that, they intend to build the resource and grow it from PEA to a pre-feasibility study

(PFS) and then on to a feasibility study (FS).

Back to the resource estimate, he said: Geologic resource estimating tends to be more bullish than probabilistic modeling. By using a more conservative statistical and probabilistic approach, we ensure that we are not overpromising to the market, he maintained. They’ve taken “some pain” for that approach but he is convinced that it is the right approach to restore credibility.

On the permitting side, he said, it’s a two-year long regulatory process. After that, it's an 18-month to 2-year process to build a mine, so any expectations of this being operational in 2-years' time is not practical. He is not prepared to make promises that he knows are not grounded, he said.

They are focused on more timely communications as well, he told us. For example, they have started doing real-time resource modeling, i.e. they're not waiting until the end of the year to update the resource. Information regarding the progress being made by Treasury Metals is coming out faster and better, he told us.

How is the Program Funded?

We next turned to the proposed drilling. How it is to be funded, we asked?

We are already funded, Wyeth said. In February 2021 they raised USD$17.5M: 7.5M in flow-through funding for drilling and $10M to fund our technical studies, Impact Benefit Agreements (IBAs), and permitting. The drilling itself is funded through year-end 2021, he continued. They have 2 drilling rigs running at the moment, one at Goliath and one at Goldlund. A third rig will be coming shortly, he said.

To be honest, Wyeth said, they've had five press releases within the last six-month period regarding the drilling progress. Every single one of them is showing what they said it would show: intersections, higher than average resource grade, and the opportunity to grow ounces at the asset.

Wyeth told us that they said they would raise the money, conduct a robust three-rig drilling program, and bring in a team that can actually build this mine. Those puzzle pieces have been and continue to be addressed to move the company forward and put Treasury Metals on a different path, he told us.

As An Investor What Should I See?

If you are a new investor coming in, he said, take a look at the preliminary assessment. It revealed $328M NPV and a 30.2% IRR post-tax at USD$1,600 Gold. It also indicated a  $233M CAPEX cost and a two-year payback period. These are good results, Wyeth said.

The resource will grow with the targeted drilling they are doing, he continued. He said he’s not going to wave his arms and give some numbers. Instead, he said, they will do the drilling, remodel the resource, and then show investors that it is higher.

How do you demonstrate scale to the investor community, we asked the CEO? That 60,000 m of drilling will have a lot of work to do to increase the number of ounces in a big way, we said.

Well, certainly to convert from inferred to indicated resource, we must do targeted drilling, Wyeth said. The drilling program is intended to take the resource from 1.1M oz. upwards to 1.5M oz., he said. There is no lack of drill-worthy targets on the property, he added. He intends to bring in ounces that can quickly be added to inferred status and then make them part of the mine plan. He hopes hoping to add a couple of 100,000 oz. each year with this type of drilling.

Are you Looking To Flip the Property?

Many companies that are at the PEA stage hope to get through development and then offload their project to someone else for a tidy profit. Are you going to pursue that route, we asked?

Wyeth answered this way: Before he joined Treasury, he did a lot of research on the company, the resource, the team, and the board. He met with every single board member and asked one question: Are we building this or are we looking to sell it? If the answer had been we were looking to sell it, he wouldn't have joined the company, he told us.

As mentioned, Treasury Metals intends to provide monthly, real-time updates to the market. Towards the end of the year, they’ll issue numbers on resource updating.

The First Mining Issue

Tell us about your overhang issues with First Mining, we asked the CEO. There is some share and warranty activity scheduled to take place in mid July. He responded that there is a perception issue going on. He has spoken to quite a few of the First Mining shareholders, and there are two perceptions out there. One perception is that this is going to create a lot of volatility and the overhang is going to be negative. But, he said, that in chatting with quite a few of the shareholders, they've got into First Mining because they wanted a development story and Treasury is a development story and is actually more advanced than First Mining at this stage. Wyeth is in the latter camp, he said.

Treasury Metals’ Share Registry

You mentioned that you have gone from 17% to 26% in terms of institutional shareholding, we said. Tell us more about your share registry, we asked.

He replied that they are getting around and talking to many shareholders and potential investors. They are addressing legacy issues head on, he said.  He’s telling people that they have reached critical mass for a major turnabout only about nine months ago.

The company is starting to see even more institutional ownership, he said. More analysts are evaluating them as well, he offered. Wyeth’s message is that this company is undervalued, and that we are systematically, prudently and honestly advancing it forward, he indicated

Plan for the Rest of 2021

In closing, we chatted with the CEO on what the market might see for the remainder of 2021 regarding Treasury’s activities. In addition to communicating results on a monthly basis, Wyeth had the following items, among others, on the calendar for the remainder of 2021:

·   More and better metallurgical testing

·   Evaluations of the tailings facilities

·   Resource update towards the end of this year

The PFS will be worked on but not ready until 2022. The overall plan for the rest of the year is a simple: To make progress to get this thing operating and then go from there.

To find out more, go to the Treasury Metals website