Québec, Canada, constantly tops the charts as a hot destination for mining.
That’s not news to many — the province is responsible for one-fifth of Canada's mining output.
Rated the sixth-most attractive mining jurisdiction globally by the 2021 Fraser Institute, Québec is a low-risk mining jurisdiction blessed with diverse resources — 15 metals and 13 minerals.
Québec's soils produce a variety of minerals such as zinc, copper, graphite, lithium, niobium, cobalt, nickel and titanium and harbor rare-earth metals like niobium, titanium dioxide, cobalt and platinum.
Apart from being home to Canada’s largest operating gold mine — Canadian Malartic Corp. that’s jointly owned by Yamana Gold Inc. AUY and Agnico Eagle Mines Ltd. AEM — mining in Québec accounted for 34.3% of Canada's gold production in 2019.
Other players in the mining industry like Eldorado Gold Corp. EGO, Maple Gold Mines Ltd. MGM, Troilus Gold Corp. TLGCHXMF and Midland Exploration Inc. MD have spent an average of CA$8.5 billion ($6.6 billion) a year in Quebec while the industry generates CA$962 million ($744 million) annually for the provincial government, excluding corporate income taxes.
Strategic Investment Opportunity? Can we say “Prospective Investment Opportunity?” or “instead?
A growing player in the province, Troilus is focused on getting the Troilus Mine back into production. In 2017, the company purchased the mine, which had $350 million worth of inherited infrastructure including a substation, power and permitted tailings facility. From 1996 to 2010, the Troilus Mine produced more than 2 million ounces of gold and nearly 70,000 tons of copper.
Building on the success of that mine, the company is advancing mineral exploration and development on 1,420 square kilometers of land in the Frôtet-Evans Greenstone Belt in Quebec.
Since acquiring the Troilus Mine project, the company has experienced ongoing exploration success and has demonstrated the tremendous scale potential of the gold system on the property with significant mineral resource growth. Since acquiring the project, the company has drilled over 200,000 meters, increasing the gold equivalent (gold/copper/silver) mineral resources on their property from 2.7 million ounces to 8.1 million ounces.
Troilus is advancing engineering studies following the completion of a robust preliminary economic assessment (PEA) in 2020, which demonstrated the potential for the Troilus project to rank among the top gold- and copper-producing asset in Canada.
Led by a team with a track record of successful mine development, Troilus believes it is positioned to become a North American cornerstone project.
Next month, the company plans to deliver a new mineral resource estimate and a pre-feasibility study — two major de-risking milestones. According to some, Troilus could be a potential acquisition target as major players look to add to their reserves and future production.
Bites By Numbers
- Acquired the past-producing Troilus Project with a 2.75 million ounces gold equivalent (AuEq) resource in 2017 for $300,000 cash plus 2.5% net smelter royalty (NSR).
- Since 2017, gold and copper resources have grown 195% from 2.75 million ounces to 8.11 million ounces valued at more than $10 per ounce. Additional growth is expected in new
- Former production site with more than $350 million worth of inherited infrastructure, significantly reducing the cost to bring the asset back into production and resulting in a streamlined permitting process (tailings facility already permitted).
- Preliminary Economic Assessment results from 2020 place Troilus among the top five gold producers in Canada with an annual production of approximately 250,000 ounces, bottom-quartile cash costs, low capital expenditures and a net present value of approximately $1 billion. Prefeasibility is coming in mid to late September 2022.
- Over $145 million has been raised since the acquisition. Current cash position of approximately $20 million. About 200 million shares outstanding — with 60% institutional share ownership from more than 50 global funds, including Franklin Global Equity Fund, Caisse de Depot et Placement du Quebec, Sprott Inc., Aegis Value Fund, Gold 2000 Ltd. Fund, Ruffer LLP, Mackenzie Investments, AGF Management, and others.
- Currently trading at ~$0.50 ($100 million market cap). The average target price of the five analysts currently covering Troilus, including Cormark Securities Inc., Stifel Financial Corp. SF, Canaccord Genuity CCORF, Laurentian Bank of Canada LRDCF and Haywood Securities, is $3.61, with the highest target at $4.25.
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Featured photo by Troilus Gold Corp.
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