Troilus Gold amasses US$1.3B in export credit agency loan guarantees

Troilus Gold (TSX: TLG; US-OTC: CHXMF) continues to receive the financial backing of global export credit agencies, this time from Export Development Canada (EDC), to support the development of its copper-gold project in Quebec.

On Thursday, the company announced a new letter of intent (LOI) from EDC for up to US$300 million, which, together with the LOIs recently signed with the export credit agencies of Germany, Finland and Sweden, brings the total potential funding guarantees to US$1.3 billion.

The amounts aren’t loans themselves, but the levels to which the export agencies would cover potential defaults if Troilus was unable to repay third parties. Those lenders haven’t been secured yet. The preliminary agreements provide a robust foundation for a multi-faceted financing structure to advance the project, the company said in a news release.

The EDC funding is subject to its rigorous due diligence process, including but not limited to, economic, technical, environmental and social, it added. A financial Crown corporation owned by the Canadian government, EDC facilitated more than US$8 billion in business through its customers in the mining sector in 2023.

“As a Canadian company, this support from EDC reinforces the Troilus project’s importance to Canada’s critical minerals strategy and broader resource objectives, while highlighting our nation’s leadership in advancing domestic projects with global significance,” commented CEO Justin Reid.

Troilus is focused on advancing its flagship copper-gold project located in the Val-d’Or district of Quebec towards production. The property hosts a former mine that produced 2 million oz. of gold and almost 70,000 tonnes of copper between 1996 and 2010.

In May, the company produced a feasibility study that demonstrated the potential for Troilus to be among the largest gold producers in Canada. Over an estimated 22-year mine life, its annual production in gold equivalent would average 303,000 oz., with peak production of 536,400 oz.

As outlined in the feasibility report, the project has an after-tax net present value (at 5% discount) of US$884.5 million and an internal rate of return of 14% under the base case scenario. The initial capital cost to build the 50,000-tonne-per-day open pit mine is estimated at approximately US$1.1 billion.

Shares of Troilus Gold rebounded sharply following the new LOI announcement, up 31% to 34¢ apiece by late afternoon in Toronto. The company’s market capitalization is just over $121 million.

Correction: A previous version of this article suggested the export agencies were funding the project to the amounts stated. Instead, they are backing up potential loans in case Troilus Gold defaults.