In a July 29 research note, Laurentian Bank Securities analyst Jacques Wortman reported that Troilus Gold Corp. (TLG:TSX; CHXMF:OTCQB) announced a new resource estimate for its Troilus project and, afterward, held a technical session.
Wortman described the update as "positive in terms of resource growth" and specified the increases. Since the previous update and using a 0.3 grams per ton (0.3 g/t) cutoff grade, the Indicated resource increased 11% to 177.3 million tons (177.3 Mt). Total contained Indicated ounces are up 8% to 4.29 million ounces (4.29 Moz).
The Inferred resource, which included the Southwest zone, grew 121% to 116.7 Mt. Total contained Inferred ounces rose 81% to 2.76 Moz.
Whereas overall tons went up significantly, the analyst noted, grades went down a bit. The grade of the Indicated resource decreased 4% to 0.75 g/t, and the grade of the Inferred resource dropped 19% to 0.73 g/t. The greater tons, though, more than offset the lower grades, particularly that of the Indicated resource.
Wortman noted that two factors drove the increases in overall tons and contained ounces. They were a higher gold price assumption, of US$1,600 per ounce, up from US$1,400, and inclusion of the Southwest zone, which contributed 0.51 Moz gold.
"Management believes that both tonnage and the 0.7 g/t grade of the Inferred Southwest zone resource have significant growth potential with additional drilling," he relayed.
The analyst added that Laurentian intends to revise its current key model assumptions based on comments Troilus Gold made in its technical session. One change is raising the estimated throughput. Another is leaving the underground mining scenario as an option for consideration down the line instead of including it in the preliminary economic assessment, which is expected in late September.
"Troilus Gold has succeeded in further growing the overall resource base at Troilus," Wortman concluded.
Laurentian has a Buy rating and a CA$2.85 per share target price on Troilus Gold, whose stock is trading now at about CA$1.40 per share.
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Disclosures from Laurentian Bank Securities, Troilus Gold Corp., July 29, 2020
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