Troilus Gold (TSX:TLG) - Binding LOI's Change Everything

Jan 31, 2025

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Interview with Justin Reid, CEO of Troilus Gold Corp.

Our previous interview: https://www.cruxinvestor.com/posts/troilus-gold-tsxtlg-multi-decade-gold-copper-mine-with-c2b-npv-potential-5431

Recording date: 30th January 2025

Troilus Gold is advancing one of North America's most significant gold and copper development projects, positioned at a crucial time when new mine supply is scarce and metal prices are strengthening. The Quebec-based project, with 13 million ounces equivalent in resources, represents a rare opportunity for investors to gain exposure to a large-scale development story in a tier-one jurisdiction.

The project's economics are compelling, particularly in the current market environment. At $2,000 gold, the operation is projected to generate $150 million US in annual free cash flow, with that figure rising to approximately $300 million US at current gold prices. This scalability in the project's economics provides investors with significant leverage to metal prices while maintaining robust returns even at more conservative price assumptions.

What sets Troilus apart from many development peers is its strong financial backing and clear path to funding. The company has secured $1.3 billion in letters of intent from European Export Credit Agencies and Export Development Canada, with plans to take on $700-850 million in debt. This level of financial support is particularly noteworthy and is driven largely by the project's strategic copper component. European smelters, facing critical concentrate shortages due to the loss of major suppliers like Copper Panama, view Troilus as a vital future source of supply. As CEO Justin Reid emphasizes, "Copper's going to fund this, gold's going to drive the value."

The development risk profile is mitigated by several factors. Being a brownfield site provides approximately $500 million in infrastructure savings and simplifies the permitting process. The company has assembled an experienced technical team, including recent additions of Andy Frontin as operations manager and Denis Rivard for project development. The engagement of BBA for detailed engineering, leveraging their experience with similar projects like Detour and Malartic, further strengthens the technical execution plan.

The project also benefits from its location in Quebec, a premier mining jurisdiction, and the current macroeconomic environment. With costs denominated in Canadian dollars and revenue in US dollars, the operation stands to benefit from current currency dynamics. As Reid notes, "Selling our product in US dollars are costs in Canadian dollars. Right now, I want leverage to Canadian gold miners who are actually benefiting from the current economy."

For investors, Troilus offers multiple potential catalysts and value creation opportunities. The company's critical minerals status enhances access to government support and strategic financing options. The project's scale and strategic importance make it a potential acquisition target for major producers seeking growth. Furthermore, ongoing detailed engineering work is already identifying opportunities for optimization beyond the feasibility study base case, while the property maintains exploration upside potential.

With 70% institutional ownership, strong financial backing, and clear development milestones ahead, Troilus represents a compelling opportunity for investors seeking exposure to both gold and critical minerals in a tier-one jurisdiction. The company's systematic de-risking approach, combined with strategic importance in the copper market, positions it well for potential revaluation as it advances toward production.

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View Troilus Gold's company profile: https://www.cruxinvestor.com/companies/troilus-gold