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Troilus to raise C$20.5M, buyback 2.5% NSR

Troilus Gold has entered into a definitive agreement with First Quantum Minerals to buy back a sliding 2.5% net smelter return royalty (NSR) attached to the mineral claims and mining lease known as the Troilus mine for C$20 million in cash.
Troilus to raise C$20.5M, buyback 2.5% NSR Troilus to raise C$20.5M, buyback 2.5% NSR Troilus to raise C$20.5M, buyback 2.5% NSR Troilus to raise C$20.5M, buyback 2.5% NSR Troilus to raise C$20.5M, buyback 2.5% NSR

Troilus Gold's Troilus project in Quebec, Canada

Staff reporter

Troilus also entered into an agreement with Cormark Securities for a bought deal offering of 5.5 million flow-through shares priced at $1.92 per share for proceeds of $10.5 million.

The underwriters have also agreed to purchase on a bought deal private placement basis, 9.1 million shares priced at $1.10 per share for proceeds of $10 million,

"We view the buy-back of the first Quantum NSR as a highly accretive transaction to Troilus shareholders based on the modelling and economics as presented in the recently filed positive preliminary economic assessment(PEA)," said Troilus Gold CEO Justin Reid.

"When presented with the chance to repurchase and cancel a 2.5% NSR on the Troilus project, we were eager to take advantage of this opportunity to further improve the economics and value of our project."

A September 2020 PEA put initial capex at US$333 million for a 22-year mine targeting average annual production of 246,000 ounces of gold over the first 14 years, with a peak of about 300,000oz in year five.

The project has an indicated resource of 177 million tonnes grading 0.87 grams per tonne gold-equivalent for 4.96 million ounces and inferred of 116.7Mt grading 0.84g/t for 3.15Moz Au-eq.

Shares in Troilus Gold are trading at $1.23, valuing the company at $141 million.