Troilus Gold (TLG) - Reawakening 6.5Moz Gold & Copper Beast
Troilus Gold is a Toronto-based, Quebec focused, advanced stage exploration and early-development company focused on the mineral expansion and potential mine re-start of the former gold and copper Troilus mine. Troilus holds a strategic land position of 142,000 ha (1,420 km²) northeast of the Val-d’Or district, within the Frôtet-Evans Greenstone Belt in Quebec, Canada. From 1996 to 2010, Inmet Mining Corporation operated the Troilus project as an open-pit mine, producing more than 2,000,000 ounces of gold and nearly 70,000 tonnes of copper.
We recently spoke with Justin Reid, Chief Executive Officer of Troilus Gold Corporation, about some of the exciting news regarding their Troilus gold and copper project in Quebec, Canada. The company intends to restart production at the Troilus mine, which has several million ounces of gold defined on the property.
Troilus Gold is a USD$200M, junior mining company singularly focused on de-risking and advancing the past-producing Troilus gold and copper project, located in Quebec, Canada, toward modern profitable production. The Troilus Project is headed for fast-track re-opening, buoyed by the company’s clean, well-capitalized balance sheet and commitment to sustainable development.
Management And Direction
In addition to CEO Justin Reid, the management team includes Paul Pint, President; Richard Harrison, COO (on seat as of Aug. 1, 2021); Denis Arsenault, CFO; Blake Hylands, Senior Vice President Exploration; Ian Pritchard, Senior Vice President Technical Services; Daniel Bergeron, Vice President, Quebec Operations; Bertrand Brassard, Chief Geologist; Jacqueline Leroux, Director of Environment; Brianna Davies, Legal and Corporate Secretary; Catherine Stretch, Vice President Corporate Affairs; and Caroline Arsenault, Corporate Communications Officer. In addition, an eight-member Board of Directors serves the management team.
Troilus Gold Project
The Troilus Gold project is a former mine located northeast of the Val-d’Or District of Quebec. While in operation from 1996 to 2010, the mine produced 2 million oz. of gold and close to 70,000 tonnes of copper.
The deposit lies in the eastern part of the Foret-Evans Greenstone Belt. Mineralization occurs along the edges of a diorite pluton, the Troilus Diorite, as well as in porphyritic felsic intrusions.
Because of recent past mining activity, the property has excellent infrastructure, which includes a network of good roads, power delivered by Hydro-Quebec, a permitted tailings facility, and a water-treatment plant.
Troilus Gold Corporation acquired the property in 2017, believing it to be a unique opportunity to revitalize and re-establish the mine in one of the globe’s most favourable mining districts. The company has completed a PEA, which supports a combined open-pit-and-underground mining operation with low initial capital costs and high rate of return for a 35,000 tonnes per day operation over a 22-year mine life.
This company is all about developing the past –producing Troilus gold and copper Mine. The firm has completed 200,000 m of drilling that has added over 6.5 Moz of additional gold reserves. The PEA is finished, the Pre-Feasibility study will be completed in the fourth quarter of this year, and the asset is in a fast-track-to-production situation, he told us.
Where’s the Sex and Sizzle?
We get the story, we told Reid, but then asked him why don’t we see any big news about this, sex and sizzle, so to speak? He responded that indeed they are not spending big dollars on high-price marketing. Instead, he said, all their capital is going back into the ground, developing the resource. He reminded us that Troilus has just as good a grade of ore as the best operations in Canada, like Malartic and Detour, and they got bought up for billions of dollars each. “We're about making money and so the faster that I can show you cash-flow, the faster that I can go through the permitting process and I can build a team to deliver this to you”, he told us.
How the Money Will Be Made
So, we followed up on his thought, asking him how he will make money for investors. He gave us a very people-oriented answer. First, he said, in order to make money you’ve got to have the right people to get the work accomplished. Keep in mind, he said, that with the high commodity price, there is actually a glut of PEAs on the market. The members of the management team and board of directors consist of some of the highest-quality people with extensive mining experience. Then, he said, their geologic team is proven and top-notch, already having added 6.5 M oz. to the reserve base in less than three years. And in the areas of ecology and sustainability, they also have those bases well covered with excellent people.
The disciplines are well staffed. The capital structure is in place. All pieces are together to produce cash as quickly as humanly possible, he told us.
A Bit About COO Richard Harrison
Troilus recently announced that Richard Harrison would join the company in a newly created position of Chief Operating Officer effective August 1, 2021. Given his wealth of experience over the last 20 years, we asked Reid to comment on the new arrival and how this will impact the business.
He told us that first of all, he agreed that Harrison is an amazing addition. He worked 7 years at Malartic. But we were able to persuade him to join up because we are so undervalued at the moment. He loved the size and flexibility of our team. He realizes that Troilus will be a top-tier producer in Canada for at least the next twenty years. And, Reid said, he’s going to become a very large shareholder.
The company currently has 4 rigs operating in the asset and they are drilling about 10,000 m each month. The drilling is all infill, not rote exploration, meaning that they are penetrating ounces to be mined, he told us. Details on drilling results are due in the 3rd quarter of this year, and look very good so far, he said. These results will provide the numbers and information they need to get to Pre-Feasibility, he indicated.
In addition to drilling, the company has also acquired acreage as well. Earlier this year they closed on a deal with Urban Gold, which helps secure the company land position in the district. They felt it was the right thing to buy them out while Urban was still small.
Time Frame for Mine Reopening
Reid said that they can’t cut corners but are ahead of the game in many respects, such as having a permitted tailings facility and a great deal of built-in infrastructure. He indicated that he couldn’t make up a story and say that they’ll be in production in a year and a half, because he can’t honestly support that at this time. He said they are doing things by the book and not missing any studies. He wants the company to be in a position to answer any question and take any scrutiny on in an effective way. As he said “We want it to be bullet-proof every step of the way and that's how you build a good mine.” He also told us that the shareholders know that they are in a capital-intensive process and they want all the boxes checked so that things are done correctly.
He is confident that the buy-the-book approach is working. They recently just bought back a royalty that they had sold to First Quantum last year. He told us: “Most companies my size are selling royalties, we're buying them back.”
Also, he sees great potential in the copper part of the asset. They expect 15% of the mine’s revenue to come from copper. Between the royalty buyback and the recent price appreciation in copper, the firm has added almost USD$¼Bn of value to the project over the last few months.
All that was discussed, he said, “We are going to build a mine.” Fifty-one global institutions are invested and they want a mine built. Ten percent of existing shares is held by management and they want a mine built. If someone comes in and makes an offer, we’ll certainly evaluate it, he indicated. Either way, a mine will be built. He projects that the mine will be a 35,000 t/day operation when it comes on stream, and that it would be more but that’s all the existing infrastructure can effectively handle. After infrastructure is optimized, it could become a 50 – 60,000 t/day mine.