In a Jan. 4 research note, Canaccord Genuity analyst Tom Gallo reported Troilus Gold Corp.'s (TLG:TSX; CHXMF:OTCQB) exploration progress in 2020 and the available results.
Gallo presented the highlights of Troilus Gold's exploration work conducted last year. The Toronto-based company discovered three new high-grade gold zones at its Troilus Gold project, Beyan, Goldfield Boulder and Testard, through its efforts during the summer, including a 23,000 kilometer airborne survey and sampling. He briefly described each.
Beyan is 8 kilometers (8 km) southwest of the Southwest Zone and "traced over a 225 meter strike length." Grab samples from Beyan returned up to 9.7 grams per ton (9.7 g/t ) gold and 32.5 g/t silver. Additional work showed 12 g/t gold 600 meters north of the original discovery, in the current Alex discovery.
The Goldfield Boulder Zone is 28 km southwest of Beyan where boulders and outcrop can be traced over a 4 km strike length. Grab samples from Boulder outcrop demonstrated 26.2 g/t gold and 27.8 g/t silver.
"This is the furthest exploration to date and is part of the recently acquired Tortigny claim block," Gallo noted.
Testard is 10 km south of the main mineral resource area. Grab samples from outcrop there returned 203 g/t gold, 2,440 g/t silver and 4.37% copper. Surface sampling showed 82 g/t gold and 1,060 g/t silver.
"The company believes there could be additional subparallel mineralized quartz veins at Testard," indicated Gallo.
Also in 2020, Troilus Gold started a 20,000-meter drill program with two aims: to upgrade its current mineral resource estimates and to continue mineralization expansion and exploration. All results from this campaign are pending.
"Though the system appears to be opening up toward the southwest, we are particularly curious as to its potential to the northeast," Gallo noted. The northeast area appears highly prospective for higher-grade gold due to possible bending or fracturing along the main trend and system tightening. "Though this is highly speculative based on large scale geologic maps and geophysics, we believe this region to be highly prospective," Gallo wrote.
In other news from 2020, Gallo reported Troilus Gold completed the buyback of a 2.5% net smelter returns (NSR) royalty for CA$20 million in cash. The company closed a CA$22.1 million bought-deal financing on Dec. 12, 2020.
"We view this [buy back] as positive, and the elimination of the NSR royalty from our model adds CA$20 million to the net present value of the project, which is currently CA$912 million," Gallo wrote.
Canaccord Genuity has a Speculative Buy rating and a CA$2.75 per share target price on Troilus Gold, whose stock is trading now at about CA$1.17 per share.
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Disclosures from Canaccord Genuity, Troilus Gold Corp., Company Update, January 4, 2021
Analyst Certification: Each authoring analyst of Canaccord Genuity whose name appears on the front page of this research hereby certifies that (i) the recommendations and opinions expressed in this research accurately reflect the authoring analyst’s personal, independent and objective views about any and all of the designated investments or relevant issuers discussed herein that are within such authoring analyst’s coverage universe and (ii) no part of the authoring analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the authoring analyst in the research, and (iii) to the best of the authoring analyst's knowledge, she/he is not in receipt of material non-public information about the issuer.
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Required Company-Specific Disclosures (as of date of this publication)
Troilus Gold Corp. currently is, or in the past 12 months was, a client of Canaccord Genuity or its affiliated companies. During this period, Canaccord Genuity or its affiliated companies provided investment banking services to Troilus Gold Corp.
In the past 12 months, Canaccord Genuity or its affiliated companies have received compensation for Investment Banking services from Troilus Gold Corp.
In the past 12 months, Canaccord Genuity or any of its affiliated companies have been lead manager, co-lead manager or comanager of a public offering of securities of Troilus Gold Corp. or any publicly disclosed offer of securities of Troilus Gold Corp. or in any related derivatives.
Canaccord Genuity or one or more of its affiliated companies intend to seek or expect to receive compensation for Investment Banking services from Troilus Gold Corp. in the next three months.
