In a May 14 research note, Haywood analyst Pierre Vaillancourt wrote that at Troilus Gold Corp.'s (TLG:TSX; CHXMF:OTCQB) Troilus project in Quebec, the Southwest zone shows mining potential.
This is the case in part, he indicated, because recent drill results showed the Main zone of Southwest to have geological characteristics that are similar to that of the historical Z87 zone, "with strong alteration and discrete high-grade intervals." (Southwest's West zone is similar to the J4 and J5 zones.) The results were from six holes of a larger program drilled at Southwest, which sits 3.5 kilometers from Z87.
Vaillancourt further described the findings. They showed that grades are distributed primarily in bimodal fashion, which is a pattern seen in other Southwest hole results. Narrower intervals of high grades of 1–46 grams per ton (1–46 g/t) are in or proximal to broader areas with lower grades of 0.5–0.9 g/t.
Some of the new highlight intercepts include 13.3 g/t gold over 1 meter (1m) within a broader intercept of 1.1 g/t gold over 21m; 15.1 g/t gold over 1.1m; 1 g/t gold over 5m; and 1.3 g/t gold over 5m. "The intersections were at open-pittable depths, most with intercepts within 250m of surface," Vaillancourt reported.
The analyst highlighted that the Southwest zone has a potential roughly estimated resource of 450,000 ounces at a grade of 0.85 g/t gold, but qualified that it is difficult to determine a grade at this early stage. This calculation is based on the existing resource, Z87 with an Indicated resource of 1.6 million ounces (1.6 Moz) grading 0.78 g/t gold and the J4 and J5 zones with an Indicated resource of 1.42 Moz grading 0.57 g/t gold.
"We look for Troilus Gold to develop the Southwest zone into an open-pittable target that could complement the existing resource or possibly become a start pit," commented Vaillancourt.
Along those lines, the Toronto-based explorer is expected to release a resource estimate shortly and, potentially, complete a preliminary economic assessment on a larger resource thereafter.
Overall, Vaillancourt noted that "Troilus is well positioned among exploration peers with a strong balance sheet, a growing resource and pending economics studies." Accordingly, Haywood has a Buy on the company. The firm's target price on Troilus Gold is CA$2 per share, which compares to the current stock price of about CA$0.99 per share.
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Disclosures from Haywood Securities, Troilus Gold Corp, May 14, 2020
Haywood Securities, or certain of its affiliated companies, may from time to time receive a portion of commissions or other fees derived from the trading or financings conducted by other affiliated companies in the covered security. Haywood analysts are salaried employees who may receive a performance bonus that may be derived, in part, from corporate finance income.
Haywood Securities, Inc., and Haywood Securities (USA) Inc. do have officers in common however, none of those common officers affect or control the ratings given a specific issuer or which issuer will be the subject of Research coverage. In addition, the firm does maintain and enforce written policies and procedures reasonably designed to prevent influence on the activities of affiliated analysts.
Analyst Certification: I, Pierre Vaillancourt, hereby certify that the views expressed in this report (which includes the rating assigned to the issuer’s shares as well as the analytical substance and tone of the report) accurately reflect my/our personal views about the subject securities and the issuer. No part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendations.
Important Disclosures
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▪The Analyst(s) preparing this report (or a member of the Analysts' households) have a financial interest in this company.
▪ Haywood Securities, Inc. has reviewed lead projects of this company and a portion of the expenses for this travel have been reimbursed by the issuer.
