Respawns 2 Minutes after you defeat it, in the Boss Arena in the Desert.
Daggers are the best weapons to farm the Treasure.
It may be best to ignore Treasure, seeing as it's reward is only 5,000 gold or that of 5 Bulls, but its health is more than 11x more than that of 5 Bulls.
If you can get the treasure to a Cactus, then surround the Treasure with a Wall (use the Cactus as a wall also for this), then it will lose health as if you used the pit trap, spike combo and since Cactus can't break, it will do the job quickly. But make sure you get the last hit, or you will not win the gold.
You can also use Boost Pads to boost the Treasure into Cacti.
It's the first and only mob added that can't move.
The Treasure was added in version 1.1.
In 1.5, it's reward was cut in fourths, from 20,000 to 5,000
At an unknown update (presumably 1.6.5 or 1.6.6), it's immunity to Pit Traps was removed.