Troilus Gold Corp (TSX:TLG, OTCQX:CHXMF) is ready to make its mark on the global stage.
The Toronto-based, Quebec-focused resource company is on a mission to revive the former Troilus gold and copper mine, a former producer that is located northeast of the prolific Val-d’Or district in the Frtet-Evans Greenstone Belt.
In a few short years since acquiring the past-producing asset, the company has completely transformed it into what is now well positioned to become one of the largest gold and copper producers in Quebec, and even in Canada.
The project’s roots date back to the late 1950s, marked by the discovery of copper and nickel anomalies in erratic blocks. Over the years, the property exchanged hands until Inmet Mining (TSX:IMN) Corporation, now First Quantum, acquired it in 1993. That marked the beginning of a successful era that saw the mine produce over two million ounces of gold and nearly 70,000 tonnes of copper from 1996 to 2010.
Now Troilus is on a mission to revive the historic mine and breathe new life into the asset. To get them off to a good start, the project already has a plethora of existing infrastructure valued at ~$350M, including an operating substation, power lines, well-maintained roads, water treatment facilities, and a permitted tailings facility.
Drilling success
Since 2018, the company has completed over 300,000 meters of drilling, leading to substantial growth in mineral resources. As outlined in a July 2020 resource estimate, the project already has Indicated resources of 4.96 million ounces (Moz) of gold equivalent (AuEq) – and Inferred resources of 3.15 Moz AuEq. Armed with these impressive figures and ongoing exploration, the company continues to unveil the significant potential to expand the scale of the project.
Even more promising was the company’s Preliminary Economic Assessment (PEA) completed in August 2020. The PEA highlighted average annual gold production of 220,000 ounces over the first five years and 246,000 ounces over the first 14 years, with an estimated 22-year mine life at an initial capital cost of a reasonable $333 million. Moreover, with a post-tax Internal Rate of Return (IRR) of 32.2% and Net Present Value (NPV) of $915 million based on a gold price of $1,750/oz (escalating to 38.3% and $1,156 million at a spot gold price of $1,950/oz) the project has a strong financial outlook.
Investors and analysts alike are eagerly awaiting a definitive feasibility study on the project and an updated mineral resource estimate, which will incorporate the positive results from recent drilling at the deposit. Throughout 2022 and 2023, Troilus has conducted extensive drilling programs and fieldwork which have yielded positive results attesting to the potential for enhanced project economics as well as potential of the property and the Frtet-Evans Greenstone Belt as a district-scale gold system.
Zone X22 has been a particular zone of interest, a high-grade body of mineralization discovered in late 2022, which the company has already expanded to a one-kilometre strike length, and continues to demonstrate zone continuity, relatively shallow depth, and favourable grades. These higher-grade zones could factor into the early years of the mine life – and have a positive impact on the grade profile.
Troilus CEO Justin Reid told Proactive that the results from Zone X22 are “a different beast” due to the higher grades there in comparison to the main deposit. One recent hole revealed a high-grade interval of 103.81 grams per ton (g/t) gold equivalent (AuEq) over 1m and 1.09 g/t AuEq over 45m, part of a broader intersection of 0.83 g/t AuEq over 82m.
A lower strip ratio also means that the company has to move less rock to get to the gold than other parts of the mine.
“It’s going to sequence very nicely early on in the +20year mine life,” Reid said. “Essentially it is going to have a very positive economic impact: higher grade, lower strip and early life in our economic model, which we like to say is going to make a good deposit great.”
Cashed up
The company has a strong financial position: its $30 million in cash, marketable securities, and government tax credits should support the company's objectives until 2024. That means that Troilus is well placed to complete a feasibility study and updating the mineral resource estimate by the end of the year and its other goals well into the following year.
With a rich history, robust infrastructure, a seasoned team of experts backing the project, and the federal and provincial permitting processes well underway, Troilus seems to have all the ingredients for success in place.
Quebec also has the benefit of being one of the most attractive mining regions worldwide. The Fraser Institute's annual survey of the mining industry consistently ranks Quebec as a top-tier destination for mining ventures, due to the provinces pro-development attitude and access to abundant low cost environmentally friendly power from hydroelectric sources.
'Blue sky growth potential'
As Troilus emerges as a dominant player in the Canadian mining landscape, its potential for growth looks incredibly promising. CEO Reid’s experience speaks for itself: a former a geologist and capital markets executive with over 20 years of experience in the mineral resource space. The firm’s impressive capital structure, coupled with its lack of debt, provides a stable foundation for growth, while its leadership team boasts a track record of successful mine development and operations. Additionally, Troilus Gold benefits from a solid institutional shareholder base, including major global resource funds.
Moreover, Troilus Gold has taken significant strides towards sustainable development. In August 2020, the company achieved a notable milestone by becoming the first mineral exploration company to receive UL 2723: ECOLOGO Certification, recognizing its commitment responsible development. Most recently, Troilus joined the United Nations Global Compact in August of 2022, the world’s largest corporate sustainability initiative helping achieve the 17 United Nations Sustainable Development Goals.
Reid and the Troilus team are committed unlocking substantial value for shareholders while steadily progressing the development of the Troilus project.
“In the coming months, we are on track to achieve significant de-risking milestones, which we believe will continue to demonstrate the blue-sky growth potential of our project,” Reid concluded.
Contact Angela at angela@proactiveinvevstors.com
Follow her on Twitter @AHarmantas