The power of two – Treasury Metals harnessing gold project synergies

Combined district-scale Goliath-Goldlund Gold Project

There is an old saying that the best place to put a gold mine is next to another gold mine. When miners can consolidate adjacent or nearby gold assets, it can present co-development opportunities which typically reduce costs of production due to synergies. With the gold price still hovering near a record high (currently at USD 1,946/oz) any gold mining junior that can advance to production rapidly is likely to do well. Today I look at one company that is doing just that – combining two gold projects for rapid co-development towards production.

Treasury Metals Inc. (TSX: TML | OTCQX: TSRMD/TSRMF) is focused on gold and is developing their Goliath and Goldlund Projects in Ontario, Canada. The company recently acquired the Goldlund Gold Project and is moving towards the development phase of an integrated Goliath-Goldlund Project. Treasury Metals has two other early stage gold exploration stage projects named Weebigee and Gold Rock, both in Ontario, and an early exploration stage Lara Polymetallic Project (Au, Ni-Cu-(PGE), Cu-Zn-Pb-Ag) located in British Columbia.

Treasury Metals Inc.’s gold projects in Ontario Canada

Treasury Metals Inc.'s gold projects in Ontario Canada


Treasury Metals say that they have “one of the largest undeveloped gold assets in Canada”, so let’s take a look at their flagship, newly combined, development stage asset, the Goliath-Goldlund Project.

The Goliath-Goldlund Project

Located only about 25 km apart with a 2 km distance between the boundaries, there is significant opportunity for operational synergies with the Goliath-Goldlund deposits.

With an M&I Resource of 1.23 Moz @ 2.36 g/t AuEq and an Inferred Resource of 0.23 Moz @ 3.51 g/t AuEq, Goliath is a 50 km2 tenement suitable to open pit and underground mining. The Goliath Gold Project has received environmental assessment approval by the Government of Canada and provincial permits are advancing.

Goldlund is a 280 km2 tenement with open pit potential with an Indicated Resource of 0.81 million oz @ 1.96 g/t Au and an Inferred resource of 0.88 million oz @ 1.49 g/t Au. The newly acquired Goldlund Project gives Treasury Metals exposure to a large and highly prospective land package with further resource expansion potential.

As shown below this region of Ontario has already proven successful for other companies with multi-million ounce gold discoveries.

Together the projects have ~2.0 Moz Au in the M&I resource categories, and ~1.1 Moz Au in the Inferred resource category

Treasury Metals


The combined Goliath-Goldlund Project now has a total combined property size of 320 km2 with a 65km potential strike zone. Goliath and Goldlund are reported to have similar metallurgical properties creating the potential for shared processing infrastructure, as Goldlund is within trucking distance of a potential operation at Goliath. Treasury Metals is expecting to achieve other synergies such as unit operating cost reductions and optimizations anticipated as a result of greater open pit mining focus.

Local infrastructure is excellent being in the middle of an existing mining district in Ontario. There is excellent access to the Trans-Canada Highway, related power and rail infrastructure, and nearby towns for labor.

Next steps

Treasury Metals is now working on a PEA for co-development opportunities for the Goliath-Goldlund Project. This will include optimization of the mining sequence for processing throughput and envisions initial production from Goliath Open Pit, followed by integrated production from underground and Goldlund Open Pit once fully permitted (a 2-3 year time frame expected). Meanwhile the company expects to continue exploration to grow and better define the resource and progress the construction permitting process. In particular, the company plans to drill the promising Miller Prospect.


Treasury Metals strategy is to implement the successful ‘Hub & Spoke’ model. This means having an initial mining ‘hub’ at the Goliath Open Pit (1st phase production) and Underground (2nd phase) location, then later followed by adding the ‘spoke’ at Goldlund Main Open Pit (3rd phase), with the potential of subsequent satellite deposits such as the Miller Prospect (4th phase).

Closing remarks

The new larger Treasury Metals looks well equipped to rapidly advance towards production. With a healthy current market cap of C$163m (and C$8m of cash) Treasury Metals has already attracted much attention, with investors anticipating the company progressing rapidly towards a strong PEA, potential resource growth, and becoming a mid-term ‘open-pit’ (and hopefully low cost) producer. We will know a lot more on the economics after the PEA is released.

Investors should also keep in mind that Treasury Metals has two other gold projects in Ontario and what looks to be a promising poly-metallic project in BC. Certainly analysts see further possible upside with a price target of C$2.27 from the current stock price of C$1.50.

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