Strategic Merger Forms New Gold Mining Powerhouse

Source: Streetwise Reports 05/13/2024

The newly merged entity will focus on the Goliath Gold Complex, which is nearing production readiness.

Treasury Metals Inc. (TML:TSX: TSRMF:OTCQB) and Blackwolf Copper & Gold Ltd. (TSXV.BWCG;OTC:BWCGF) have merged, forming a strategic partnership poised to enhance their production and financial standing in the gold market. The newly merged entity will focus on the Goliath Gold Complex, which is nearing production readiness.

It is expected to produce approximately 109,000 ounces of gold annually at competitive costs. This move is 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.

Financially, the merger strengthens the companies’ combined cash reserves, which now exceed CA$10 million, with an additional CA$4 million anticipated from flow-through financing. This robust financial position will support extended exploration and development activities aimed at increasing the companies’ gold output and market footprint.

Why Gold?

According to Provident Metals, just as copper bullion is praised for its “distinctive value in the global market due to its industrial business enterprise worth,” gold, too, holds an intrinsic value that shields investors during periods of inflation and market downturns.

The narrative surrounding copper, celebrated for its durability and crucial role in industries such as electrical and engineering, mirrors the investment logic for gold.

As copper “yields excellent value to an investor” due to its continuous demand and growth in developing countries like China and India, gold similarly benefits from global economic uncertainties, thereby solidifying its status as a safe-haven asset. Provident Metals points out that diversifying assets with metals like copper can protect and enhance a portfolio, a principle that applies equally to gold, particularly in light of its proven track record of preserving wealth across centuries.

A May 3 report from Red Cloud Securities sees the strategic merger between Blackwolf Copper & Gold Ltd. and Treasury Metals positively, highlighting the enduring value of strategic acquisitions in the mining sector, especially in stable jurisdictions. This merger enhances shareholder access to advanced development-stage assets and a stronger financial foundation, illustrating the benefits of diversified investments in precious metals during uncertain economic times.

Expert Analysis

In a May 2 analysis, Technical Analyst Clive Maund highlighted the positive aspects of the merger between Treasury Metals and Blackwolf Copper and Gold. Maund points out that this merger is poised to advance the Goliath Gold Project in Ontario significantly. He expresses a positive outlook, suggesting that the agreement could prove very beneficial for both entities involved.

According to Maund, “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. We see the GGC Project as buildable and expandable on a district scale.” [OWNERSHIP_CHART-1961]

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 — maybe higher, maybe lower than the current US$2300/oz — asset SELLERS will want a much higher price for their ounces in the ground.”

This observation underlines the strategic timing of the merger, positioning the new entity to capitalize on favorable market conditions and the rising gold prices, which could enhance the valuation of their combined assets significantly.

Ownership and Share Structure

According to data from the latest press release, management and insiders hold 19.23% of the Blackwolf Copper & Gold. This includes Frank Giustra.

With this transaction, Treasury Metals, along with other strategic investors, holds 37.03%

The rest is with retail.

According to Market Watch, the company currently has a market cap of approximately CA$15.32 million, trading within a 52-week price range of CA$0.09 to CA$0.37.

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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. James Guttman 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.

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Contributing Author Disclosures

1. Author Certification and Compensation: Clive Maund of clivemaund.com is being compensated as an independent contractor by Street Smart, an affiliate of Streetwise Reports, for writing this article. Maund received his UK Technical Analysts’ Diploma in 1989. The recommendations and opinions expressed in this content accurately reflect the personal, independent, and objective views of the author regarding any and all of the designated securities discussed. No part of the compensation received by the author was, is, or will be directly or indirectly related to the specific recommendations or views expressed.

Clivemaund.com Disclosures

The above 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 only be construed as a recommendation or solicitation to buy and sell securities.

( Companies Mentioned: TSXV.BWCG;OTC:BWCGF, )