Time to look at Gold…Troilus Gold
Earlier in March, Gold (the commodity) tested and held an important technical support level at approximately $1,680/oz. Since then Gold has based and started to move higher, not dramatically, but with yesterday’s close at $1,733/oz it’s now headed in the right direction again after a great run from $1,450/oz in November 2019 to well over $2,000/oz in August 2020. This is important, as with most commodity stocks, it’s a lot easier for the underlying producers of these commodities to go up when they aren’t swimming against the current.
So let’s look at Troilus Gold Corp. (TSX: TLG | OTCQB: CHXMF). The company has had a busy start to 2021, reporting several new drill results, and then a tuck-in acquisition of UrbanGold Minerals on March 23rd. In fact, the company has been busy since it acquired the former producing Troilus Mine in December 2017. Since then, the company has added over 100,000 ha to its land position in and around the existing Mine (pro-forma the UrbanGold purchase), drilled over 100,000 metres including a new discovery zone (SouthWest Zone) and completed a positive PEA in August 2020. And those are just the highlights for this Toronto based miner focused in the Frotêt-Evans Greenstone Belt in Quebec (NE of the better known Val-d’Or Gold region).
Several companies around the world have found success revisiting former producing mines/regions and applying new techniques and technologies or just plain old due diligence and this is no exception. Troilus began by expanding the drilling around the existing Z87 and J Zone pits that were successfully mined from 1996-2010. Based on that work the Troilus technical team analyzed the historical and new data that was being collected and formulated a new geological interpretation of the Troilus property, which led to a new discovery in the Southwest Zone that they began drilling in late 2019.
Results from the Southwest Zone (roughly 3 kilometres southwest of the former mine and main mineral resource area) represent one of the most important near-term mineral growth targets on the Troilus property. Troilus will include all the recently announced Southwest results from late 2020 and ongoing 2021 results into an updated mineral resource estimate and Pre-Feasibility Study, targeted for completion in the second half of 2021.
To summarize, Troilus already has a mineable resource based in a low-risk jurisdiction with excellent accessibility. There is existing infrastructure that came with the original mine acquisition that will significantly reduce the overall cost to bring a new mine into production, thus helping to lower the AISC (All-In Sustaining Cost, which is a standardized Gold Industry comparison metric) to the lowest quartile in Canada. Three existing strike zones (Z87, J, Southwest) are all open on strike and at depth – which means they haven’t found the limit of mineralization yet. Plus over 142,000 ha of property (pro forma UrbanGold purchase) to continue exploring. This all adds up to an exciting opportunity for investors.
Even if Gold moves in a sideways, consolidation pattern for the next little while, miners with the right story have a chance to excel. The trend is your friend, so let’s hope gold continues along the same trend as Troilus Gold’s drilling results.
Dean Bristow has been involved in the North American Crude Oil business for 30 years including Energy Trading, Infrastructure Development, Transportation, and Refining. During that ... <Read more about Dean Bristow>