Troilus upsizes FS for 303,000ozpa AuEq
Throughput increased to 50,000tpd
Troilus Gold has reported a feasibility study on its Troilus gold-copper project in Quebec, Canada for a 50,000tpd open-pit mining operation that will produce more than 300,000ozpa of gold equivalent for 22 years.
The mine will produce 244,600ozpa of gold, 17.3Mlb of copper and 446,700ozpa of silver, or 303,000ozpa of gold equivalent at an all-in sustaining cost of US$1109/oz, with a peak of 456,100oz of gold, 31.8Mlb of copper and 613,600oz of silver in year seven.
Over the life of the project, it will produce 5.4Moz of gold, 382Mlb of copper and 9.9Moz of silver from a reserve of 380Mt grading 0.49gpt gold, 0.058% copper and 1gpt silver, or 0.59gpt gold equivalent.
The company increased the processing throughput to 50,000tpd from 35,000tpd in the 2020 preliminary economic assessment (PEA).
The project will yield a base case net present value of $884.5 million at a 5% discount rate and internal rate of return (IRR) of 14% with a 5.7-year payback following a $1.1 billion initial capital expenditure at metal prices of$1975/oz gold, $4.05/lb copper and $23/oz silver. These increase to $1.6 billion and 19.5% at April average metal prices of $2332/oz gold, $4.30/lb copper and $27.50/oz silver.
The project has a capital efficiency of $161/oz produced, lower than the average of $180/oz, and its NPV/capex ratio is 0.8. The 2020 PEA for a smaller project featured a $333 million initial capital and 22.9% IRR using a $1475/oz gold price.
"The project has reasonable capex and capital intensity, including bottom quartile operating costs among the major Canadian gold mines. … Troilus stands not only as a strategically significant project that aligns with the province of Quebec's priority on producing strategic metals but is also positioned to be amongst the largest scale, lowest cost gold and copper projects across Canada," said Troilus Gold chief executive Justin Reid.
The Troilus project comprises four main zones of mineralisation on a NE-SW trend covering about 7km: Z87, J Zone, SW Zone and X22. These deposits will be mined using conventional open pit mining methods. Ore will be processed in a flotation mill to produce gold-rich copper concentrate for sale to a smelter, with provision for gravity gold recovery to produce doré after the first year.
Troilus said exploration upside exists from grassroots geochemical anomalies to early-stage drill targets that are being explored, both near the mine and regionally. A 25,000m drilling programme is underway, targeting the gap zone between Z87 and SW, and at depth at X22.
The project has been designed to minimise the environmental footprint, including using a cyanide-free process, progressive reclamation, using the existing tailings facility and minimising emissions through the use of sustainable energy sources.
The company will now focus on finalising the environmental and social impact assessment and progressing the federal and provincial permitting processes, which were initiated in May 2022. Troilus has engaged Auramet International as a financial advisor for project financing.
Shares in Troilus Gold are trading at 676c, valuing the company at C$183 million.
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