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2015 Five Junior Mining Companies to Watch: Treasury Metals

Treasury Metals (TSE: TML) could be as little as two years away from going into production at its Goliath find, said Norm Bush, vice-president of the Goliath Gold Project, putting it in line to be one of Canada’s next gold mines.
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Adam Larsen, an exploration geologist working for Treasury Metals, examining some of the latest cores. Treasury’s Goliath Gold Project shows 1.7 million ounces of gold inferred and indicated – but further drilling in the area could reveal more.

Treasury Metals (TSE: TML) could be as little as two years away from going into production at its Goliath find, said Norm Bush, vice-president of the Goliath Gold Project, putting it in line to be one of Canada’s next gold mines.

“If it all comes together as we’re expecting it will and the timelines that we currently have in front of us hold, we probably would be in production about two, two and a half years from now,” Bush said.

“We are in front of regulators and others, and of course we’re a little bit at the whim of the marketplace, but overall we think that this project stands a good chance of being the next (gold) mine in Canada after Rainy River.”

On April 27, Treasury Metals moved one step closer with the announcement that its Environmental Impact Statement (EIS) met the Canadian Environmental Assessment Agency’s approval. That cleared the way for public comment and federal technical reviews to take place during most of May.

Located 20 km east of Dryden and just 2 km from the Trans-Canada Highway, the project is close to infrastructure – part of the reason why projected costs in its initial Preliminary Economic Assessment (PEA), released in August 2012, are in the $740 to $750 per ounce range with a CAPEX under $100 million. The PEA suggested production of 80,000 ounces of gold per year for about 10 years with an average grade of 2.87 grams/tonne. Indicated and inferred deposits are 1.7 million ounces.

Further drilling seems to be confirming that those numbers are reasonable, though a future feasibility study would give a clearer idea of the project, as would the results from a recent in-fill drilling program.

“We don’t have all of the assay results yet, but the ones that we have gotten back… are very encouraging,” Bush said.

Bush said that they have not delineated the whole deposit, so there is more potential. Future finds could lower production costs per ounce even further.

“What we do know about the deposit is that it is open along strike and open at depth. We haven’t done a lot more exploration drilling at this point. We’ve been basically focused on converting a lot of the inferred ounces into indicated. We haven’t done any really deep drilling simply because of costs,” Bush said.

“We have enough ounces identified now to support the project getting going.”

The Goliath project is just one spot on a larger property of approximately 45 sq km. Treasury also has a second, slightly larger property in the area due south of Goliath called Goldcliff.

“We’ve done some exploration (within the Goliath property) and had some pretty good indications, but we haven’t fully explored it,” Bush said. As for Goldcliff, “We haven’t really done much work on that, though we have had some excellent results from the little bit of drilling that we did do down there. It’s a big property we have here.”

Bush said they want to use some of the revenue generated from Goliath, once it’s operational, to fund further exploration.

“The market is pretty challenging these days in terms of raising any sort of capital for exploration,” Bush said. “If we can support some of that exploration through our own revenues, that would be the ideal case.”

Bush said that environmental sustainability while developing this project was important to Treasury, especially given its location close to Dryden and the nearby municipality of Wabigoon.

“What we look at doing is minimizing the resources that we use in terms of our mining operations,” Bush said. “We’ll be looking at doing things like progressive reclamation along the way.”

That means that as the open pits are depleted, Treasury would start reclaiming the pits, partially capping the waste rock pile, and removing the plant and facilities after completion.

“Most of the area will be returned to its natural state,” Bush said. “The one exception might be where we have one of the open pits – that might become a small lake.”

Treasury Metals has another project in B.C. and interest in a mine in Mexico.