Treasury Metals (TSE:TML) is planning a $3.0 million bought deal private placement, it said late yesterday.
Under an agreement with a syndicate of underwriters led by Canaccord Genuity, they will purchase units of the company at a price of 75 cents each, and a minimum of $2.0 million flow-through common shares for 80 cents each.
Each unit will be comprised of one common share and one half of one share purchase warrant, which can be used for two years from the closing date.
Each whole warrant will be good for one common share of the company at $1.00 each.
Treasury said it will also give underwriters an option to sell additional units or flow-through common shares to raise additional proceeds of up to $2.0 million.
The new funds will be used to advance the miner's assets and for general working capital purposes, it said.
Closing of the deal is anticipated before the end of the month, subject to regulatory approvals.
Late last month, the company reported new drill results from its flagship Goliath gold project, noting that early interpretation suggests an extension of the C Zone deposit.
The most significant results in this recent phase of drilling corresponded to a new mineralised shoot that hit 7.35 metres grading 1.39 grams per tonne (g/t) gold in drill hole TL12-267, and 7.00 metres at 3.44 g/t gold in drill hole TL12-268.
The company said that early interpretation suggests the shoot could be an extension of the C Zone deposit.
Treasury's activities are focused on two exploration projects in Canada - the Goliath gold project and Goldcliff project near Dryden, Ontario.
The Goliath property sits on an NI 43-101 compliant resource of 1.63 million ounces of gold (1.7 million ounces of gold-equivalent) in the inferred and indicated categories combined, at an average grade of 2.0 g/t.
It lies 125 kilometres east of the City of Kenora, and 20 kilometres east of Dryden.
In July, Treasury released its updated PEA for the Goliath gold project, highlighting annual production of 80,000 ounces of gold equivalent with a life-of-mine head grade of 3.05 grams per tonne.
According to the updated PEA, Goliath is expected to have a 10-plus-year, combined open pit and underground mine life with processing throughput averaging 2,500 tonnes per day (tpd).
At the base case US$1,375 per ounce gold price, the life of mine pre-tax net present value (NYSE:NPV) of the project is estimated at $199.0 million based on a five per cent discount rate. The project's internal rate of return (NYSE:IRR) is expected to be 39.3 per cent, with a payback period of 2.2 years.