Troilus Gold Corp.'s (TLG:TSX; CHXMF:OTC; CM5R:FRA) Southwest zone at its namesake project returned "impressive" recovery rates of copper, gold, and silver on metallurgical testing, reported Stifel analyst Ian Parkinson in a June 28 research note.
"Today's results are an important step towards the prefeasibility study (PFS) we expect to see in mid-2022," Parkinson wrote.
In other news, reported by Laurentian Securities analyst Jacques Wortman in a June 29 research note, Troilus Gold's new Gap zone drill results for five holes" show continuity of mineralized units found in Z87 and the Southwest zone." The company will not include these results in the upcoming PFS.
"Some of the mineralized intervals reported today are quite deep, but several appear to be high enough in the system to be captured in conceptual open-pit shells in future resource updates," Wortman wrote.
Parkinson pointed out Troilus Gold is undervalued and trading significantly below its peers at a spot price: net asset value of 0.09x versus the group average of 0.21x, according to Stifel data. Stifel's target price on the company is CA$4 per share, and Laurentian's is CA$3.30 whereas Troilus Gold's current share price, in comparison, is around CA$0.56. Stifel and Laurentian rate Troilus Gold Buy.
"Troilus Gold is currently the cheapest company in our coverage universe," wrote Parkinson.
As for the metallurgical testing, recovery rates of copper, gold, and silver from a 3-ton sample from Troilus' Southwest zone were 93.5%, 88.3%, and 89.4%, respectively, relayed Parkinson. He indicated the results are notable for two reasons. One, they are consistent with previously determined recovery rates, used in the preliminary economic assessment.
Two, they complement the J zone recovery rates achieved on past testing. They were 92.9% for copper, 90.4% for gold, and 88.8% for silver.
Regarding the imminent Troilus project PFS, Parkinson noted that Troilus Gold's drilling over the past few years "should help strengthen mining-specific elements of the PFS economics." In the Southwest zone, the company has added ounces to the resource after the completion of the 2020 preliminary economic assessment. At the J zone, Troilus Gold has widened the mineralized horizon, converted waste to ore, and lowered the strip ratio.
In terms of Troilus Gold's new Gap zone drill data, Wortman indicated they are "early stage but encouraging and support the explorer's thesis that mineralized units in the Z87 and Southwest zones extend into the Gap zone." He added, "We have long believed that the Gap zone has significant potential."
The new Gap zone results come from two areas. Three holes placed southwest of the Z87 pit showed continuity of mineralization downdip and updip from Z87 South. Returned assays include 1.04 grams per ton of gold equivalent (1.04 g/t Au eq) starting 417 meters (417m) downhole (GZ-006); 1.73 g/t Au eq over 6m starting 94m downhole (GZ-012); and 1.22 g/t Au eq over 6m starting 61m downhole (GZ-030).
Troilus drilled the remaining two holes in the northward extension of the Southwest zone. GZ-010, which started hitting mineralization near surface, demonstrated 1.31 g/t Au eq over 2.6m starting 13.4m downhole.
GZ-015 intersected mineralization at various depths. It showed 97 g/t Au eq over 1m starting 42m downhole, 2.12 g/t Au eq over 1m starting 174m downhole, and 0.77 g/t Au eq over 3m starting 193m downhole.
Troilus Gold is on track to finish the phase two Gap zone drill program in July and results should follow.
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Disclosures for Stifel GMP., Troilus Gold Corp., June 28, 2022
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Disclosures for Laurentian Bank Securities Inc., Troilus Gold Corp., June 29, 2022
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