In a July 29 research note, PI Financial analyst Philip Ker wrote that "the ongoing resource growth and remaining upside from the new Southwest zone" at Troilus Gold Corp.'s (TLG:TSX; CHXMF:OTCQB) Troilus asset "paves the way for future growth and the foundation of a near-term project preliminary economic assessment (PEA)."
Ker pointed out how much the Troilus resource has grown since Troilus Gold acquired the asset in 2016. The Indicated resource increased 142% and the Inferred resource grew 350%. The Indicated open pit resource, now 4.21 million ounces (4.21 Moz) at 0.8 grams per ton gold equivalent (0.8 g/t Au eq) gained 601,000 ounces (601 Koz) Au eq. The Inferred open pit resource, now 2.27 Moz at 0.7 g/t Au eq, expanded by 1.49 Moz. Of that addition, 583 Koz graded 0.8 g/t Au eq came from the Southwest zone.
"The deposit remains open in all directions and will be a key target for Troilus to expand on the new resource," noted Ker.
As for the Troilus PEA, Ker reported that PI Financial models a 20,000 ton per day open-pit operation that will yield 2.5 Moz Au eq over the mine's 16 year life. The cash cost is estimated to be US$784 per ounce, and the all in sustaining cost is forecast to be US$827 per ounce. Underground mining is an option for the future. Troilus Gold management indicated it expects the PEA to be released in the next four weeks, and that event, Ker noted, will be a key catalyst for Troilus Gold's valuation.
"Given the rapid success of resource growth, project advancement and pathway towards a restart of the brownfield operation, we see the PEA setting the initial foundation for its operating scope moving forward but also anticipate ongoing enhancements with exploration success and project evolution," Ker commented.
Troilus Gold intends to restart exploration at the Quebec property this year.
"Investments into its exploration camp, infrastructure, geotechnical drilling and about 20,000m of exploration expansion and infill drilling and efforts at its new Lac Allonge claims will be a priority for Troilus Gold," wrote Ker. The explorer is well funded to proceed, having recently completed a CA$25M equity financing.
PI Financial has a Buy rating and a CA$1.80 per share target price on Troilus Gold, which is trading now at CA$1.30 per share, a discount to its peers, Ker indicated.
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1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Disclosures from PI Financial, Troilus Gold Corp., Research Flash, July 29, 2020
I, Philip Ker, hereby certify that all of the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly related to the specific recommendations or views expressed in this report. I am the research analyst primarily responsible for preparing this report.
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