In a Feb. 10 research note, Red Cloud Securities analyst Jacob Willoughby reported that Troilus Gold Corp.'s (TLG:TSX; CHXMF:OTCQB) latest drill results from its 2020 fall-winter drill campaign at the Troilus project were positive and showed three key findings.
"Troilus is amongst the first to explore targets aggressively and systematically outside the historical mining footprint, and we believe it has begun to highlight the district-scale potential of its 107,300 hectare land package," Willoughby stated.
Willoughby presented and interpreted the new results, which are of three holes Troilus drilled in the project's Southwest zone.
One, the drilling identified new extensions of mineralization at depth. Hole TLG-ZSW20-203 intersected unknown higher-grade zones of mineralization, thereby extending mineralization about 100 meters (100m) below the pit area proposed in the preliminary economic assessment (PEA). The hole returned 6.66 grams per ton gold equivalent (6.66 g/t Ag eq) over 3m including 17.92 g/t Au eq over 1 m along with 1.2 g/t Au eq over 16m.
Two, drilling, via hole TLG-ZSW20-200, confirmed the continuity of mineralization within the PEA pit area. Highlight assays were 1.44 g/t Au eq over 6m and 3.35 g/t Au eq over 1m within a broader intersection of 1.07 g/t Au eq over 9m.
Three, because TLG-ZSW20-200 was outside of the resource envelope, its results indicate the existing resource could be expanded from its current Indicated and Inferred 8,100,000 ounces of gold equivalent.
"In addition to increasing the production profile, the discovery of new, near-surface zones of higher-grade mineralization, especially within the PEA pit, is expected to significantly enhance the economics of the Troilus project," Willoughby highlighted.
He went on to note that Troilus Gold continues to drill with four rigs at Troilus. The explorer's current 20,000m program, in progress, calls for expansion drilling in the Southwest zone, which remains open in all directions; infill drilling in the Z87 and J zones; and geotechnical drilling for the upcoming prefeasibility study. Willoughby noted the company is well-positioned financially to advance Troilus throughout 2021 and carry out regional exploration.
Near-term potential catalysts for Troilus Gold's stock, Willoughby indicated, are additional drill results from the Southwest, Z87 and J zones. Then, later this year, a resource estimate update and a subsequent prefeasibility study are expected.
Red Cloud has a Buy rating and a CA$3.50 per share price target on Troilus Gold. In comparison, the stock is trading now at about CA$1.14 per share.
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