In a March 16 research note, Stifel Nicolaus Canada analyst Ian Parkinson discussed Troilus Gold Corp.'s (TLG:TSX; CHXMF:OTCQB) recent drill results at the Southwest Zone of its Troilus project located in the Val-d'Or district of Quebec.
The analyst stated that Troilus Gold's most recent drill results serve to "effectively increase the Southwest Zone strike by 25%, more than doubling the width of the mineralized package."
The report noted that although the grades returned were in line with the current Inferred resource grade, the higher volume of ore found near surface bodes well for expanding the Southwest Zone significantly beyond what is currently defined in the PEA. Parkinson stated that "it only took TLG 8,500m to define 580 Koz at the Southwest Zone, and we look forward to the effect this drilling will have on growing ounces beyond the already impressive +8 Moz resource."
Stifel Nicolaus believes that the near surface ounces offer a much lower technical risk and require lower capital intensity to mine than the underground ounces incorporated in the 2020 PEA and thus serve to "effectively push out the underground 'ounce bank.'"
The report mentioned that the maximum width of mineralization at the Southwest Zone has been expanded by 650 meters to more than 800 meters over the pit shell presented in the project's PEA. Stifel noted that it anticipates that the solid resource at the Trolius project will increase from the 8.11 Moz defined to date as the company continues to execute on drilling.
Stifel commented, "We like the ultimate widening of mineralization beyond the pit shell, as TLG can access more of the known deeper ounces without increasing the effective strip ratio, thereby improving economics of the overall project."
Stifel Nicolaus Canada rates Troilus Gold a Buy with a target price of CA$4.00 per share versus its current share price of about CA$1.15.
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Disclosures from Stifel GMP, Troilus Gold, March 16, 2021
Important Disclosures and Certifications
I, Ian Parkinson, certify that the views expressed in this research report accurately reflect my personal views about the subject securities or issuers; and I, Ian Parkinson, certify that no part of my compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this research report.
Company-Specific Disclosures:
Troilus Gold is a client of Stifel Canada or an affiliate or was a client of Stifel Canada or an affiliate within the past 12 months.
Troilus Gold has paid the research analyst’s travel expenses to view their material operations.
Troilus Gold is provided with investment banking services by Stifel Canada or an affiliate or was provided with investment banking services by Stifel Canada or an affiliate within the past 12 months.
Stifel Canada or an affiliate has received compensation for investment banking services from Troilus Gold in the past 12 months.
Stifel Canada or an affiliate expects to receive or intends to seek compensation for investment banking services from Troilus Gold in the next 3 months.
Stifel Canada or an affiliate managed or co-managed a public offering of securities for Troilus Gold in the past 12 months.
The equity research analyst(s) responsible for the preparation of this report receive(s) compensation based on various factors, including Stifel's overall revenue, which includes investment banking revenue.
