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Target Price Raised on Firm Exploring Past-Producing Gold Mine in Quebec

Source: Streetwise Reports

 

August 11, 2020 (Investorideas.com Newswire) The recent revisions Laurentian Securities made to its model on Troilus Gold are presented and the effects are described in a report from the financial services firm.


In an Aug. 6 research note, analyst Jacques Wortman reported that Laurentian Securities revised its model on Troilus Gold Corp. (TLG:TSX; CHXMF:OTCQB) in anticipation of the preliminary economic assessment (PEA) on the Troilus project expected in September and to reflect a higher gold price assumption.

Consequently, Laurentian increased its target price on Buy-rated Troilus to CA$4.70 per share from CA$2.85. The current share price is about CA$1.39.

Wortman outlined the changes Laurentian made to its Troilus model and their effects. As far as PEA-related revisions, Laurentian removed its prior assumptions about potential underground operations, expanded the scope of the mill and open-pit operations to 10,000,000 tons (10 Mt) per year from 7.2 Mt, increased initial capex for the open pit-only scenario to CA$450 million (CA$450M) from CA$350M, raised open pit, per ton mining costs and lowered per ton milling and general and administrative costs, decreased gold recovery to 85% from 86%, and shortened the mine life assumption to 13 years from 16.

The net results of these changes indicate that the "project economics could potentially still be robust despite delivering a lower gold head grade to the mill (0.89 g/t life of mine versus our prior blended underground/open-pit head grade of 1.1 g/t life of mine)," commented Wortman.

Regarding the gold price, Laurentian raised the estimate it is using in its Troilus model to US$1,850/oz from US$1,600/oz. This increased the net present value of Troilus Gold to US$354.8 million from US$200.3 million and boosted the net asset value of the Troilus project to $4.72/share from $2.88.

"As expected, lower grade projects generally demonstrate higher leverage to changes in commodity price," Wortman commented.

He noted that upcoming catalysts for Troilus Gold regarding its Troilus project include results from metallurgical tests late this month and a maiden PEA in late September. "On the broader property, significant exploration drilling is planned with a focus on the area between the past-producing pits and the new Southwest Zone, as well as the Allonge Zone to the NE."

Disclosure:

1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Troilus Gold. Click here for important disclosures about sponsor fees.

3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures from Laurentian Bank Securities, Troilus Gold Corp., August 6, 2020

Laurentian Bank Securities Inc. and/or its officers, directors, representatives, traders, analysts and members of their families may hold positions in the stocks mentioned in this document and may buy and/or sell these stocks on the market or otherwise.

The Research Analyst's compensation is based on various performance and market criteria and is charged as an expense to certain departments of Laurentian Bank Securities (LBS), including investment banking.

Laurentian Bank Securities Inc. may, in exchange for remuneration, act as a financial advisor or tax consultant for, or participate in the financing of companies mentioned in this document.

The analyst(s) certify that (1) the views expressed in this report in connection with securities or issuers they analyze accurately reflect their personal views and (2) no part of their compensation was, is, or will be directly or indirectly, related to the specific recommendations or views expressed by them in this report. The Research Analyst's compensation is based on various performance and market criteria and is charged as an expense to certain departments of Laurentian Bank Securities (LBS), including investment banking.

Within the last 24 months, LBS has undertaken an underwriting liability with respect to equity securities of, or has provided advice for a fee with respect to, this issuer.

The Analyst has visited material operations of this issuer.

This issuer paid a portion of the travel-related expenses incurred by the Analyst to visit material operations of this issuer.

To access Laurentian Bank Securities' regulatory disclosures, please click here.

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