Meeting Set To Approve Merger Between Gold Cos.

Source: Streetwise Reports 06/11/2024

Blackwolf Copper & Gold Ltd. BWCGF announced that it has filed and mailed materials for a special shareholders' meeting on June 26 to approve its proposed merger with Treasury Metals Inc. TSRMF.

The two companies announced the transaction last month, saying they plan to form a strategic partnership to focus on Treasury's Goliath Gold Complex (GGC) in Ontario, which is nearing production readiness.

In a release, the company noted that GGC is expected to produce approximately 109,000 ounces of gold annually at competitive costs, and the merger will also lead to a "renewed exploration commitment."

"The Blackwolf Board of Directors and Special Committee UNANIMOUSLY recommend that Voting Securityholders vote IN FAVOUR of the proposed Arrangement" the company said.

The move was strategically timed to capitalize on the potential rise in gold prices, with some market analysts predicting prices could reach as high as US$3,000 per ounce in the medium term.

Technical Analyst Clive Maund highlighted the positive aspects of the merger between Treasury Metals and Blackwolf on May 2. He said the move is poised to advance the GGC Project significantly.*

"This is a strong transaction for Blackwolf and Treasury shareholders that puts the company on the path of a buy and build strategy that I have implemented many times" Maund wrote. "We see the GGC Project as buildable and expandable on a district scale."

The Catalyst: Analysts Say Deal Benefits Both Cos.

GGC's prefeasibility study (PFS), conducted in February 2023, forecasted 13-year mine life. It anticipates producing 109,000 ounces of gold per year at a cash cost of US$892 per ounce and an all-in sustaining cost (AISC) of US$1,037 per ounce during the first nine years, the company said.

The prefeasibility study projected a net present value (NPV) of US$493 million at a 5% discount rate and an internal rate of return (IRR) of 33.5% based on a gold price of US$1,950 per ounce (gold was US$2,354.82 on Thursday).

There is readily available world-class infrastructure, and a Federal Environmental Assessment approval has been secured. The final feasibility study and permitting processes are currently underway.

As part of the agreement, the two companies, shortly after the announcement, upsized the merger-related financing from CA$4 million to CA$6.4 million.

"This combination (of companies) renders Blackwolf a near-term producer while providing the combined entity some exceptional exploration projects in British Columbia and Alaska" wrote Jay Taylor of Hotline.

Some other analysts agreed. "The combined company would be well capitalized to execute on its strategy and pursue further growth in a strong gold price environment" wrote Red Cloud analyst Taylor Combaluzier, who rated the stock Tender, advising clients to tender their shares with a target price of CA$0.35 per share.

"Progress on ongoing feasibility and permitting work for the GGC project by Treasury could potentially help drive the price of the BWCG shares towards our target until the transaction closes" Combaluzier wrote.

According to a May 2 Investingwhisperer.com commentary, "There is a very limited time for investors and gold majors to snap up big assets — on the cheap. As the Western world gets used to a MUCH higher gold price now — asset SELLERS will want a much higher price for their ounces in the ground."

Eligible to vote on the issue either in person in Vancouver or by proxy will be holders of Blackwolf common shares and Blackwolf options at the close of business on May 21.

Under the merger, each shareholder will be entitled to 0.607 of a Treasury Metals common share for each common share held of Blackwolf.

Outperforming Gold Prices

The price of gold hit a new all-time high of US$2,449.89 per ounce on May 20. Some are predicting a prolonged and substantial gold bull market.

Adam Rozencwajg, managing partner at Goehring & Rozencwajg, predicted that prices could go as high as US$5,000 to US$7,000 an ounce before it's all over.

According to Investing.com, "Gold prices have been outperforming across various asset classes and on a macroeconomic level. It is implicitly trading on its reputation as a safe asset with no counterparty risk, rather than the opportunity cost associated with holding a zero-yield asset."

The site said Central Bank buying of the yellow metal is also still tracking above reported levels, suggesting "sustained institutional interest in the precious metal."

Ownership and Share Structure

According to the company, management and insiders hold 9.2% of the Blackwolf Copper & Gold.

With this transaction, Treasury Metals, along with other strategic investors, holds 37.03% of the company. The rest is with retail.

Blackwolf currently has a market cap of approximately CA$15.93 million, trading within a 52-week price range of CA$0.09 to CA$0.37.

Important Disclosures:

1. Blackwolf Copper & Gold Ltd. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Blackwolf Copper & Gold Ltd.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
4. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

Disclosure for the quote from Clive Maund published on May 2, 2024*

1. For the quoted article (published on May 2, 2024), the Company has paid Street Smart, an affiliate of Streetwise Reports, US$1,500 in addition to the monthly consulting fee.
2. Author Certification and Compensation: [Clive Maund of clivemaund.com] was retained and compensated as an independent contractor by Street Smart, an affiliate of Streetwise Reports to write this article quoted. Mr. Maund is a technical analyst who analyzes historical trading data and he received his UK Technical Analysts' Diploma in 1989. The recommendations and opinions expressed in this article reflect the personal, independent, and objective views of the author regarding any and all of the companies discussed. No part of the compensation received by the author was, is, or will be directly or indirectly tied to the specific recommendations or views expressed.

Clivemaund.com Disclosures

The quoted article represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks cannot be construed as a recommendation or solicitation to buy and sell securities.