Troilus Gold Corp. (TSX: TLG | OTCQX: CHXMF) continues its run of strong drill results at the Troilus Gold Project in Quebec, Canada.
Troilus acquired the Troilus Gold Project in 2017 and it contains the former gold and copper-producing Troilus Mine and an approximately 435 square km land package. The former Troilus Mine produced 2 million ounces of gold and almost 70,000 tonnes of copper between 1996 and 2010.
Troilus recently sold 985 square km of non-core land at its Troilus Gold Project to Sayona Mining Limited (ASX: SYA | OTCQB: SYAXF) for approximately C$40 million of Sayona shares (184,331,797 shares) and retained a 2% NSR Royalty on the land.
Map showing the Troilus Gold Project in Quebec, Canada and some past drill and sample results
Troilus Gold Project Resource and PEA highlights
Troilus now has one of the largest undeveloped gold resources in Canada. The current project resource is an indicated resource of 4.96 million ounces of contained gold equivalent (“AuEq”) at 0.87g/t AuEq and an inferred resource of 3.15 million ounces of contained AuEq.
The 2020 Preliminary Economic Assessment (“PEA”) resulted in a post-tax NPV5% of US$915 million, post-tax Internal Rate of Return (“IRR”) of 32.2%, based on a US$1,750/oz gold price, and a 22-year mine life (about half open pit and half underground). The initial CapEx (net of existing infrastructure) is US$333 million and sustaining CapEx over the life of the mine is an additional US$506 million. The All in Sustaining Cost (“AISC”) is US$850 per ounce AuEq.
In terms of production volumes forecast, Troilus stated:
“Projected gold production averages 220,000 oz per year over the first 5 years and 246,000 oz average per year for the first 14 years and 98,000 from year 15 on. Projected payable Gold is 3.8 million ounces, payable Copper 265 million lbs, and payable Silver 1.5 million ounces over the 22-year mine life.“
Strong drill results potentially bode well for the upcoming resource expansion
Three recent announcements highlight the strong drilling progress on the project which will be reflected in the upcoming updated resource estimate and DFS.
- March 23, 2023: Troilus drills 2.72 g/t AuEq over 34m, including 10.83 g/t AuEq over 6m and 1.49 g/t AuEq over 35.5m, including 2.55 g/t AuEq over 4.5m in Zone X22; extends its strike length from 150m to 1km.
- February 16, 2023: Troilus extends the newly discovered “X22 Zone” strike length to more than 800 meters; drills 1.34 g/t AuEq over 18m and 2.42 g/t AuEq over 9m. The company stated: “All results reported herein lie entirely outside of the PEA pit shells and will be included in the upcoming Definitive Feasibility Study.“
- January 26, 2023: Troilus drills 4.33 g/t AuEq over 29m, including 6.37 g/t over 18m at the 87-J Connector Zone. Note: The Connector Zone is a target zone located between the two previously mined Z87 and J4 open pits.
20km geophysical trend and a 4.4km Gold-in-soil Trend at the Rocket target
Troilus believes that they have identified several significant trends on their property. These trends help Troilus choose drill targets to optimize drilling success, ultimately leading to resource growth.
The 20km geophysical trend (strike length) near the former mine site and main mineral zones
The 4.4km gold-in-soil trend near the Rocket target
Near-term catalysts for Troilus include:
- Q1/2023: Updated mineral resource estimate.
- H2/2023: Feasibility Study and inaugural mineral reserve estimate.
- 2023-2024: Permitting progress on the Environmental and Social Impact Assessment (ESIA), first started in 2022.
Troilus Gold continues to make very good progress on its Troilus Gold Project in Quebec, Canada. The project already has a substantial gold resource and a PEA completed in 2020.
A key additional bonus is that the project benefits from being a restart site, meaning there is enormous infrastructure already in place from the former Troilus Mine. Troilus puts the inherited value of these assets at US$350 million.
With the gold price on the rise, an updated resource due out soon, a feasibility study in H2/2023, C$40 million recently raised via Sayona Mining equity, and approximately US$350 million of inherited infrastructure in place, the stock looks very interesting on a market cap of C$147 million.