Treasury Metals agrees to extend closing date for Pico Machay acquisition

Treasury Metals (TSE:TML) and Pan American Silver (TSE:PAA) announced Wednesday they have agreed to extend the closing date for the Pico Machay gold project acquisition to September 21.

The Pico Machay property is a high-sulphidation gold deposit that lies within the northern extent of the Southern Peru Epithermal Gold-Silver Belt.

Treasury said it is continuing to pursue financing to purchase 100% of the Pico Machay property, including its recently filed prospectus related to a best efforts offering of its common shares, co-led by Cormark Securities Inc and Canaccord Genuity Corp.

The deal, which was originally announced in May, was amended earlier this month to extend the closing date to August 31, up from the original closing date at the end of July. 

The change also offered Treasury the option to satisfy up to US $10.5 million of the $21 million cash portion of the purchase price through the issuance of a secured promissory note to Pan American.

In addition to the $21 million cash consideration, Treasury is required to issue 11.5 million shares of its common stock to Pan American in exchange for its 100% interest in the property.

The 4,823 hectare project is in near-term mine development stage, and preliminary engineering and metallurgical testwork are expected to support a low-cost, heap leach operation, with low capital investment required. Current measured and indicated resources at Pico are estimated at 270,000 ounces, plus an additional 450,000 inferred ounces. 

Treasury has previously estimated that Pico Machay has the potential to initially produce 50,000 to 75,000 ounces of gold per year. 

The Toronto-based company's stock rose 0.86% as of 1:59 pm EDT today, to trade at $1.17 per share.