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Explorer's Shares Expected to 'Materially Rerate' in H2/20

Streetwise Reports, Streetwise Reports
0 Comments| July 3, 2020

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Recent drill results from Troilus Gold's Quebec project are analyzed in a Red Cloud Securities report.

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In a May 15 research note, Red Cloud Securities analyst Jacob Willoughby reported that drilling continues to grow the Southwest zone at Troilus Gold Corp.'s (TLG:TSX; CHXMF:OTCQB) Troilus project in Quebec.

Willoughby reviewed Troilus Gold's recently reported results of six holes drilled in Southwest. They showed that in the zone, several high-grade gold intercepts occur within larger envelopes of disseminated gold. One such intercepts was 13.28 grams per ton (13.28 g/t) gold equivalent (Au eq) over 1 meter (1m) within 1.18 g/t Au eq over 21m, seen in hole TLG-ZSW20-181. Hole TLGZSW20-186 returned 16.1 g/t Au eq over 1.1m, 1.33 g/t Au eq over 5m and 1.43 g/t Au eq over 5m. Hole TLG-ZSW20-190 demonstrated 46.4 g/t Au eq over 1m.

These intercepts further suggest that the overall grade of the Southwest zone could exceed that of the existing resource, 0.95 g/t Au eq. As of now, the weighted average derived from all Southwest drilling reported so far is 1.05 g/t Au eq (unchanged) over an average 11.5m (down from 11.9m), and this represents an 11% improvement over the current resource grade.

The drill results also indicate that the mineralization in Southwest extends for 1-plus kilometers and remains open along trend and at depth.

Willoughby noted that he expects Southwest to improve the project's overall grade and expand the current resource. Troilus Gold plans to revise the project's mineral resource to include the Southwest drill results; the update could be released in Q2/20.

Looking forward, Willoughby commented, "Given previous operators (Inmet Mining Corp.) did almost no near-mine exploration, we expect the shares of Troilus to materially rerate over the next six to 12 months as the company demonstrates organic resource expansion potential along strike from the J zone, Z87 and the new Southwest zone areas."

Red Cloud has a Buy rating and a CA$1.80 per share price target on Troilus Gold, the stock of which is now trading at around CA$1.05 per share.



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