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TICKERS: TLG; CHXMF

Quebec Gold Project PEA Shows 'Robust Potential Economics'
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Troilus Gold's PEA forecasts a high rate of return, low capex and rapid payback for the Troilus project.

Troilus Gold

Troilus Gold Corp. (TLG:TSX; CHXMF:OTCQB) announced in a news release the findings of a preliminary economic assessment (PEA) of its Troilus gold project in Quebec. "The PEA supports a combined open pit/underground mining scenario with low initial capital costs and high rate of return for a 35,000 tonne per day (“tpd”) operation over a 22-year mine life," the company stated.

The report supports "the potential for our project to become a major contributor as a large North American gold producer," CEO Justin Reid said in the release. "The first 14 years will target production in excess of 246,000 ounces gold per year peaking at in excess of 300,000 ounces in Year 5."

The PEA outlines a combination operation, consisting of open pit mining for the first 14 years followed by underground mining for the next eight years.

The Troilus operation, at a $1,475 per ounce ($1,475/oz) gold price, is projected to have an after-tax internal rate of return (IRR) of 22.9% and the net present value at a 5% discount is estimated to be $576 million. After-tax payback would occur after four years. Total cash flow over the mine life is forecast to be $1.27 billion after tax and $2.04 billion pretax.

At $1,750/oz and $1,950/oz gold, the IRR would be 32.2% and 38.3%, and the NPV5% would be $915 million and $1,156 million, respectively.

Initial pre-production costs are estimated to be $333 million.

"We believe the Troilus property has the potential to extend the mine life beyond the projected 22 years presented in the PEA and provide the opportunity to expand the scale in the future by continuing to seek increases to the mineral resource estimate with ongoing exploration and drilling," Reid added. "Our goal is to make this a cornerstone mining Project within both the Quebec and Canadian Gold landscapes."

Along with continued exploration efforts, the Canadian mining company will now work on a prefeasibility study and finalizing an environmental impact study for the Troilus project.

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Disclosure:
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.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Troilus Gold. Click here for important disclosures about sponsor fees.
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