In a May 13 research note, Haywood Securities analyst Pierre Vaillancourt reported that Troilus Gold Corp. (TLG:TSX; CHXMF:OTCQB) identified an extension of the J zone at the Troilus project that "has the potential to make a substantial addition to the resource" there.
Vaillancourt reviewed and explained these recent J zone drill results, the first since 2019. Generally, they showed new extensions of mineralization both inside and outside the pit shell previously outlined in the preliminary economic assessment (PEA).
Result highlights, the analyst noted, include 68 meters (68m) of 1.1 grams per ton gold equivalent (1.1 g/t Au eq) in hole ZJ21-226, which indicates a new parallel zone of gold mineralization within 200 meters of the surface.
Hole ZJ21-225 returned 34m of 1.01 g/t Au eq, signaling continuity of mineralization, with economic grades and 300-meter-plus widths, to the northwest. The mineralization extends over 300 meters beyond the PEA pit shell and downdip to 650-meter-plus below the surface. The hole also showed 13m of 2.12 g/t Au eq.
"These intercepts demonstrate new hanging wall mineral extensions that appear to be widening as they are drilled deeper, as has been observed in the lower levels of the J and Southwest zones," Vaillancourt wrote.
Also, he noted, the newly identified mineralization zone appears to be of higher grade than that of previous J zone results. Some of the intercepts were deeper than before beyond 300m downhole.
Now, the J zone mineralization spans a 1.5 x 1 kilometer area and remains open in all directions.
With the drilling that generated these results as well as ongoing drilling, Troilus Gold aims to more completely define and confirm continuity of the northeast-trending mineralization believed to run from the Southeast zone to the Gap zone, on to the 87 zones and then the J zone and, possibly, even further to the Allongé zone.
"The size potential for a large, lower grade, open-pit gold-copper system is considerable," commented Vaillancourt.
He indicated that Troilus Gold aims to update the Troilus mineral resource and prepare a prefeasibility study by year-end. In the interim, the explorer will continue drilling with two rigs, including in the Beyan and Cressida area to the southwest. The company plans to carry out 10,000 meters of drilling per month throughout the summer. With this program, Troilus Gold aims to further delineate mineralization and expand the existing resource.
"We look to Troilus to make significant additions to its 5.6 million ounce open-pit resource, which will have positive implications for the upcoming prefeasibility study," wrote Vaillancourt.
As such, Haywood recommends investors accumulate Troilus Gold shares before the upcoming 2021 catalysts. The investment bank rates the mining company Buy and gives it a CA$4 target price. The stock is currently trading at about CA$1.15 per share.
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Disclosures from Haywood Securities, Troilus Gold Corp, May 13, 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.
