A new study for Troilus Mining’s (TSX: TLG; US-OTC: CHXMF) namesake copper-gold project in Quebec has more than tripled the mine’s estimated value thanks to detailed engineering, an expanded reserve and higher metal-price assumptions.
Troilus now carries an after-tax net present value (NPV) of $3.2 billion (C$2.3 billion), a 22% after-tax internal rate of return (IRR), a 3.6-year payback period and a 26-year operating life, according to a company statement Wednesday. The base-case economics reflect long-term prices of $3,600 per oz. for gold, $5 per lb. for copper and $50 per oz. for silver.
Wednesday’s updated technical report builds on a May 2024 feasibility study, which outlined an after-tax NPV of $884.5 million and a 14% IRR. That study contemplated a 22-year, 50,000-tonne-per-day open-pit operation.
The new report provides “a significantly derisked baseline for the company ahead of development,” Desjardins Capital Markets mining analyst Allison Carson said in a note. Several re-rating catalysts lie ahead, including the completion of project financing by Dec. 31 and permitting in next year’s first quarter, she wrote.
2029 start
Construction is anticipated to start next year, with first ore targeted for September 2029 and commercial production in March 2030, Toronto-based Troilus said.
Initial capital is now estimated at about $1.43 billion, reflecting a more advanced project definition supported by about 95,000 hours of engineering. Life-of-mine operating costs are estimated at $19.21 per tonne of ore processed, while all-in sustaining costs are about $1,340 per oz. of payable gold, net of copper and silver credits.
The results “reinforce Troilus’ position as one of the most compelling large-scale gold-copper development projects in North America,” CEO Justin Reid said in the company’s statement.
The updated report is “kind of our cleansing statement as we go into putting the final pieces on our financing, and that's going to be over the next two to three weeks,” he told The Northern Miner in an interview last week.
“Our debt is in place with the export credit agencies, we're just finalizing that documentation. That'll show the market a fully funded deal. And then after that, we'll deliver credit committee approval and some permitting updates.”
Increased reserve
The company’s latest mine plan is based on 478 million tonnes of reserves grading 0.44 gram gold per tonne, 0.05% copper and 0.92 gram silver for contained metal of 6.7 million oz. gold, 568 million lb. copper and 14.2 million oz. silver. The reserve tonnage is about 26% larger than in the 2024 feasibility study.
Crews are carrying out drilling aimed at converting inferred material, optimizing the pits and expanding resources beyond the current mine plan. The company began a 40,000-metre exploration program on its 435-sq.-km land package earlier this year.
Payable production over the life of the operation is expected to reach 5.63 million oz. gold, 472 million lb. copper and 10.88 million oz. silver, the company said. Average annual payable production during the active mining period is estimated at about 251,000 oz. gold, 20.1 million lb. copper and 466,000 oz. silver.
Former mine
Located about 120 km north of Chibougamau in north-central Quebec, the project sits on the site of a former mine that produced roughly 2 million oz. of gold and almost 70,000 tonnes of copper between 1996 and 2010. Troilus acquired the asset in 2017.
Existing infrastructure includes all-weather roads, a 50-MW substation, more than 60 km of high-voltage power lines, a permitted tailings facility and water-treatment infrastructure.
Troilus shares rose 1.3% to C$2.36 Wednesday morning in Toronto, valuing the company at about C$1.3 billion (US$951 million). The stock has traded between 95¢ and C$2.47 in the past year.
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