In a Jan. 12 research note, Haywood Capital Markets analyst Pierre Vaillancourt noted that Troilus Gold Corp. (TLG:TSX; CHXMF:OTCQB) announced the findings from the two initial holes drilled at the Troilus property as part of its fall-winter 2020 campaign. "The drill results demonstrate promising potential for the Southwest zone to become the center of gravity for the Troilus deposit," he added.
Vaillancourt noted that the two holes showed extension of gold mineralization inside and outside of the Southwest zone open pit as defined in the 2020 preliminary economic assessment (PEA).
TLG-ZSW20-204, a 200 meter (200m) stepout hole, encountered broad gold mineralization between 50 meters and 450 meters from surface, outside of the resource envelope and the proposed pit.
Hole TLG-ZSW20-201 confirmed that mineralization extends into an undrilled area in the PEA pit. Mineralization, located 3 kilometers (3 km) from the main resource area, extends for more than 1 meter and remains open.
Further, the holes returned highlight intercepts, the grades of which were higher than those in the existing resource. Specifically, hole TLG-ZSW20-204 showed 1.95 grams per ton gold equivalent (1.95 g/t Au eq) over 20m and 1.5 g/t Au eq over 9m, and included higher grade intervals.
TLG-ZSW20-201 demonstrated 2.48 g/t Au eq over 6m and 2.5 g/t Au eq over 5m, within a broader intersection of 1.74 g/t Au eq over 21m.
Vaillancourt pointed out that mineralization of Southwest, while lithologically similar to that of the other zones at Troilus, contains "more intense alteration, with stronger silica alteration and more veining." This alteration, considered with the recent drill results, suggests that the Southwest mineralization could have higher grades than the other zones and, therefore, potentially become larger than the other Troilus deposits, the analyst noted.
To further delineate this Southwest mineralization and drill test the recently discovered Beyan and Testard target areas, Vaillancourt noted, Troilus Gold plans to carry out 50 km of drilling at Troilus this year.
"We remain positive as the 2021 drilling program gets underway, which we believe could be transformative for the resource and the outlook of the project," Vaillancourt concluded.
Haywood has a Buy recommendation on Troilus Gold and a target price on it of CA$4 per share. The stock is currently trading around CA$1.09 per share.
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Disclosures from Haywood Securities, Troilus Gold Corp, January 12, 2021
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
Of the companies included in the report, the following Important Disclosures:
▪The Analyst(s) preparing this report (or a member of the Analysts' households) have a financial interest in Troilus Gold (TLG-T).
▪ Haywood Securities, Inc. has reviewed lead projects of Troilus Gold (TLG-T) and a portion of the expenses for this travel have been reimbursed by the issuer.
▪ Haywood Securities, Inc. or one of its subsidiaries has managed or co-managed or participated as selling group in a public offering of securities for Troilus Gold (TLG-T) in the last 12 months.
▪ Haywood Securities, Inc. or one of its subsidiaries currently provides market making services to Troilus Gold (TLG-T), for which Haywood is compensated by the issuer on a monthly basis.
