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Troilus Gold (TSXV: TLG, OTC: CHXMF, FRA: CM5R) is an exploration and development stage company with an asset in Quebec which has substantial upside. Located in the Frôtet-Evans Greenstone Belt, the Troilus project was formerly mined via open-pit by Inmet Mining from 1996 to 2010. Since acquiring the asset and forming Troilus Gold Corp. in 2017, the company has been an ESG leader in the junior mining industry, prioritizing the highest environmental and social standards as it advances its gold/copper project. In 2020, Troilus received the “Excellence in Sustainable Development” award from the Quebec Mineral Exploration Association, and recently announced that is has been shortlisted for this year’s “entrepreneur of the year” award.
Troilus Gold is a Toronto-based, Quebec-focused, advanced-stage exploration and early development company. Involved in the Troilus mine, it holds a strategic land position of 140,000ha Northeast of the Val-d’Or district, within the Frôtet-Evans Greenstone Belt in Quebec. The company, focused on fast-track development, increased its land position by 2,800%, and drilled no less than 200,000 meters since 2018.
Before Troilus Gold’s ownership, the mine was operated by Inmet Mining, producing over 2 million ounces of gold and ~70,000 tons of copper in its 14 year mine life. After a failed merger with Lundin Mining and a hostile takeover of Inmet by First Quantum Minerals (2011 & 2012), Troilus was finally acquired in December 2017 in exchange for $300k in cash and a 2.5% NSR (Net Smelter Return), which was repurchased in November 2020.
Since its inception, the company has operated with a responsible mining philosophy to face Environmental, Social, and Governance (ESG) concerns. In 2020, Troilus became the first mining company to obtain the ECOLOGO certification. The company also engaged Tugliq Energy 2022 to conduct an inventory of its historical and current greenhouse gas emissions and develop a roadmap toward a future carbon-neutral mining operation, as CEO Justin Reid is convinced this is the future of mining. It is also important because Tugliq will help Troilus to identify opportunities to reduce or eliminate the use of fossil fuels and their resulting GHG emissions at the future Troilus mining operation.
“It is our objective to develop a mining operation with the potential to achieve complete carbon neutrality.”
CEO Justin Reid
In August 2020, the company released a robust PEA (Preliminary Economic Assessment). This study showed the potential for Troilus to rank among the top gold/copper-producing Canadian mines. According to this study, the extraction of gold should generate significant revenue:
-post-tax IRR of 32.2% and NPV5% of $915 million based on gold price of $1,750/oz increasing to 38.3% and $1,156 million at $1,950/oz spot gold price
-Avg. annual gold production of 220,000 oz in the first 5 years
- Avg. 246,000 oz gold produced annually for the first 14 years
-22-year mine life
-$333 million initial CAPEX
Regarding copper, Troilus would be the first Quebec copper-producing asset (#12 in Canada) and should represent 15.5% of the company’s revenue based on average production of 7,358 tons per annum.
The company has a strong balance sheet, with working capital of $20M and no debt according to their last financial statement (Q3 ending April 30), which should provide strong confidence for its shareholders. If we focus on the share structure, 200M shares are outstanding, 250k options are available (with 250k at $1.64), and almost 25M warrants (2.2M at $0.67, 1.2M at $1.20, 21.5M at $1.50). Fully diluted, it represents 239.5M shares with the opportunity for the company to raise $35.7M.. When it comes to share ownership, , 8% is held by management & insiders, and 32% by the retail investors. The company has strong institutional ownership of ~60%, of which 16% are local Quebec-based funds. Eric Girard, the Quebec Minister of Finance and Innovation, stated that the mining potential of Nord-du-Québec and the mining industry are critical to the sustainable recovery of Québec’s economy. According to him, Troilus Gold is expected to generate significant economic benefits and create many regional jobs.Troilus is currently hovering around its 52-week low of $0.415, far from its 52-week high of $0.93, and remains a “strong buy" from all six analysts who cover the company with average 1-year price targets of +$3.00, with highest target at $4.25.
Troilus Gold (TSXV: TLG, OTC: CHXMF, FRA: CM5R) ticks many boxes that investors want to see. The company has a substantial working capital of $20M, is continuously exploring through drilling while advancing the project engineering, has a solid shareholder base comprised of significant global funds, and a reputable team who is committed to sustainably developing the project. Having recently been shortlisted for AEMQ’s “entrepreneur of the year” award is proof that Troilus Gold is a strong company for the future.