Canadian Mining Journal

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Treasury tables PEA on expanded gold project at Goliath



Drilling at Goliath. Credit: Treasury Metals

Following last year’s addition of the Goldlund project to the Goliath gold project in northwestern Ontario, Treasury Metals has released an updated preliminary economic assessment (PEA) for the expanded complex.

The early-stage study suggests a 5,000 t/d combined open pit and underground operation, mining the Goliath, Goldlund and Miller deposits along a 65-km trend. Goldlund and Miller both lie on the added holdings. The 13-year operation would produce an average of 102,000 gold oz. annually in its first nine years of operation, at all-in sustaining costs of US$911 per oz. With an initial capital investment pegged at $233 million and $313 million required in sustaining capital over the life of the project (mostly for underground development and construction of a tailings facility), the after-tax net present value estimate comes in at $328 million, based on US$1,600 per oz. gold and using a 5% discount rate, with a 30.2% internal rate of return.

“With the announcement of the PEA results today, combined with receipt of the federal Environmental Assessment approval in 2019, we have confirmed the Goliath gold complex has sufficient critical mass and we expect Treasury Metals to become one of Ontario’s next gold producers,” Jeremy Wyeth, president and CEO of Treasury Metals, said in a release.

Wyeth also highlighted the exploration upside across the 330-sq.-km land package.

With the PEA release, the board has approved advancing the asset to the prefeasibility stage. Treasury has started trade-off optimization studies, baseline environmental work and other activities for the provincial permitting process.

In August 2019, the Goliath project received federal approval under the Canadian Environmental Assessment Act. With the PEA release, the Goliath deposit portion of the project may move into provincial permitting and environmental approvals using the updated mining plan. Treasury’s strategy is to treat the three deposits as three distinct projects from a permitting standpoint. The proposed mill facility is within the existing federal EA approval. Additional baseline data collection is required for Goldlund and Miller for an expected future provincial approval process.

In June, Treasury entered into an agreement with First Mining Gold for the purchase of the Goldlund project. In consideration for this acquisition, Treasury issued 130 million shares and 35 million warrants to First Mining, granted the company a 1.5% net smelter royalty (0.5% of which may be repurchased) with an additional $5-million milestone payment due. Half of the payment is due once Goldlund receives a binding mining lease for an open pit operation with the remainder due once 300,000 tonnes of ore have been mined.

The latest mine plan envisions mining starting at Goliath, with Goldlund coming online approximately one year after the initial production. Goliath underground operations are expected to start development in the third year, for first underground production in the fourth year.

Upside opportunities from the PEA include infill and exploration drilling, metallurgical test work to increase gold recoveries at Goldlund and Miller and the potential use of mined out pits to store tailings and waste, among others. Approximately 42,000 metres of drilling is scheduled for Goldlund, with a further 27,000 metres planned for Goliath. Additional exploration is also planned for the Miller deposit.

Measured and indicated resources across the three deposits total 55.4 million tonnes grading 1.1 g/t gold for a total of 2 million gold oz. with a further 23 million inferred tonnes at 0.77 g/t gold for an additional 528,000 gold oz. Resources are estimated at cut-off grades between 0.25 g/t gold (for open pit resources) and 1.6 g/t gold (for underground resources).

For more information, visit www.TreasuryMetals.com.


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