In an Oct. 19 research note, Stifel analyst Ian Parkinson reported that Troilus Gold Corp.'s (TLG:TSX; CHXMF:OTCQX) continuing expansion of the Southwest and J zones at its Troilus property in Quebec bodes well for the upcoming prefeasibility study (PFS).
"Both avenues represent economic upside versus the 2020 preliminary economic assessment (PEA)," he wrote.
This is illustrated in newly available drill results, for six broad stepout holes at the Southwest zone, noteworthy for three reasons, according to Parkinson. One, results of these holes, located outside of the PEA pit outlined in the 2020 PEA, extend the zone's strike length of near-surface mineralization by 300 meters (300m) to 1.85 kilometers. In comparison, the strike length of the mineralization comprising the resource used in the PEA is 850m.
Two, results contain a grade that is slightly higher than that in the PEA. Three, the results show that drilling in this area is encountering a growing amount of base metals.
One highlight intercept comes from hole TLG-ZSW21-530, drilled 350m away from the current PEA pit. It returned 26m of 0.97 grams per ton gold equivalent (0.87 g/t Au eq) from 76m downhole. The copper portion is 0.29% over 26m.
With respect to this interval, about "46% of the gross metal revenue per ton would come from copper, not including deductions," Parkinson wrote.
Another new solid result, from hole TLG-ZSW21-216, is 16m at 1.03 g/t Au eq at 197m downhole.
"Today's drilling shows the zone is still open in both directions along strike, and the center of gravity at Troilus is moving closer to the Southwest zone," commented Parkinson.
Along with building ounces at Southwest, Troilus Gold has been expanding mineralization at existing pits, including in the J zone, the analyst wrote.
Drilling at the J zone to date achieved two ends that should help improve the economics in the PFS, expected in 2022. Drilling widened the area of mineralization and decreased the strip ratio by converting waste to ore.
Parkinson described Troilus Gold as "one of few development projects in eastern Canada with scale and a significant sunk capital head start with existing infrastructure on site." Despite the company's potential and upside, its stock is trading cheaply, at about CA$0.87 per share, or on average, CA$65 per ounce. In comparison, Stifel's price target on this Buy-rated explorer is CA$4 per share.
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1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Disclosure for Stifel Financial Corp., Troilus Gold Corp., Oct. 19. 2021
We, Ian Parkinson and Cole McGill, certify that our respective views expressed in this research report accurately reflect our respective personal views about the subject securities or issuers; and we, Ian Parkinson and Cole McGill, certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this research report.
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Import and Disclosures
Troilus Gold is a client of Stifel Canada or an affiliate or was a client of Stifel Canada or an affiliate within the past 12 months.
Troilus Gold has paid the research analyst’s travel expenses to view their material operations.
Troilus Gold is provided with investment banking services by Stifel Canada or an affiliate or was provided with investment banking services by Stifel Canada or an affiliate within the past 12 months.
Troilus Gold is provided with non-investment banking securities related services by Stifel Canada or an affiliate or was provided with noninvestment banking securities related services by Stifel Canada or an affiliate within the past 12 months.
Stifel Canada or an affiliate has received compensation for investment banking services from Troilus Gold in the past 12 months.
Stifel Canada or an affiliate expects to receive or intends to seek compensation for investment banking services from Troilus Gold in the next 3 months.
Stifel Canada or an affiliate managed or co-managed a public offering of securities for Troilus Gold in the past 12 months.
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