Treasury, First Mining report high grades from Goldlund

Goldlund Project (Credit: First Mining Gold).

Treasury Metals and First Mining Gold reported high-grade intercepts from drilling at the Goldlund project in northwestern Ontario, completed to define the mineralization in the eastern portion of the existing resource.

In June, Treasury announced that it was acquiring the Goldlund project from First Mining - the transaction is expected to close by mid-August.

Highlights from the five drill intercepts reported include 5 metres of 0.63 g/t gold starting at 61 metres - this includes 1 metre of 173.8 g/t gold, as well as 8 metres of 0.49 g/t gold starting at 30 metres, including 1 metre of 1.73 g/t gold, and 11 metres of 0.42 g/t gold from 169 metres.

Goldlund is 2 km northeast of Treasury's flagship pre-development Goliath property

The latest holes were drilled in the northeast portion of the Goldlund deposit - according to First Mining, the 1-metre long intercept of 173.8 g/t gold is the highest-grade intercept from the 8,958-metre drill program completed at the site in 2019 and 2020.

According to the company, this exploration program has confirmed continuous higher-grade mineralization over approximately 600 metres of strike in the northeast portion of the deposit; the mineralization remains open on trend.

"We are confident that the district-scale Goldlund-Goliath gold project, in which First Mining will continue to be a significant shareholder through our holdings in Treasury Metals, will develop into one of the most important gold projects in Ontario," Dan Wilton, First Mining's CEO, said in a release.

Goldlund is 2 km northeast of Treasury's flagship pre-development Goliath property and includes open-pit resources of 12.9 million tonnes at 1.96 g/t gold in the indicated category for a total of 809,200 indicated oz. Inferred resources add 18.4 million tonnes grading 1.49 g/t gold for 876,954 oz. The resource is based on a 0.4 g/t gold cut-off grade.

To acquire Goldlund, Treasury will issue 130 million shares and 35 million warrants to First Mining, grant the company a 1.5% net smelter royalty and make a C$5-million milestone payment. Half of the payment is due once Goldlund receives a binding mining lease for an open pit operation; the remainder is due once 300,000 tonnes of ore have been mined.

Midday Tuesday, First Mining's stock was up nearly 5% on the TSE. The company has a C$322 million market capitalization.