The Troilus project has an estimated net present value (discounted at 5%) of $884.5 million and an internal rate of return of 14%, reflecting long-term forecast prices of $1,975/oz. gold, $4.05/lb. copper and $23/oz. silver.
Using current (April 2024 average) metal prices of $2,332/oz. gold, $4.30/lb. copper and $27.50/oz. silver, the after-tax NPV and IRR would rise to $1.55 billion and 19.5% respectively.
Initial development capital is projected at $1.07 billion, including all mine pre-production costs, net of existing infrastructure. The payback period is 5.7 years, based on cumulative after-tax cashflows of $2.2 billion.
Justin Reid, CEO of Troilus, said the FS outlines a “generational-scale asset” with compelling economics, both at discounted and current metal prices, highlighted by a reasonable capex and capital intensity, including bottom quartile operating costs among the major Canadian gold mines.
However, shares of Troilus Gold fell 15.2% to C$0.56 by 11:30 a.m. ET following the feasibility study release, for a market capitalization of C$155.5 million ($114m).
With the feasibility study complete, Troilus will now move towards the project’s environmental and social impact assessment, which it hopes to complete by the end of this year. Also in progress are the provincial and federal permitting processes, which it began in May 2022.
Concurrently, Troilus will focus on exploration of the 435 km² property. Numerous targets ranging from grassroots geochemical anomalies to early-stage drill targets are actively being explored, and the company believes “there is strong potential to further expand the scale of this project and extend the mine life beyond the 22 years.”
The proposed open-pit mine will have a processing capacity of 50,000 tonnes per day, a 43% increase on the 35,000 tpd contemplated in the 2020 preliminary economic assessment.
Mining will occur from four main zones of mineralization that together hold 380 million tonnes in mineral reserves grading 0.49 g/t gold, 0.058% copper and 1.0 g/t silver, containing 6.02 million oz. gold, 484 million lb. copper and 12.15 million oz. silver.
