Troilus Gold has secured a letter of intent (LoI) from Euler Hermes Aktiengesellschaft for a potential $500m loan guarantee to support the development of its Troilus copper and gold project in Canada.
Euler Hermes Aktiengesellschaft is acting on behalf of the German Federal Ministry for Economic Affairs and Climate Action as an export credit agency. This LoI grants in-principle eligibility for the untied loan guarantee.
The proposed funding is contingent upon Troilus Gold finalising a commercial off-take agreement of up to 15 years with Germany’s copper smelter Aurubis. The support remains subject to customary due diligence covering economic, technical, environmental, and social factors.
According to the Canadian development-stage mining company, the LoI represents significant progress toward the Troilus project’s comprehensive financing plan.
The plan includes advanced talks with other smelting partners, export credit agencies, commercial banks, and international mining finance institutions.
Troilus Gold CEO Justin Reid said: “Following an extremely active third quarter, we are now in advanced discussions with other export credit agencies, off-takers and financiers, as we work towards securing a comprehensive financing package for the Project’s construction.
“With rising European demand for copper concentrate and our advantageous proximity to these markets, we are advancing through financing discussions from a solid strategic position.”
Troilus Gold continued to advance its financing initiatives following a positive feasibility study (FS) published in May 2024 for the Canadian copper and gold project.
The study outlined a 22-year, 50,000 tonne-per-day open-pit operation with a projected average annual production of 303,000 gold-equivalent ounces or 135.4 million pounds copper-equivalent.
According to the FS, the peak production at the Troilus copper and gold project will reach 536,400 gold-equivalent ounces or 237.6 million pounds of copper-equivalent.
Located in north-central Quebec, the Troilus project is said to be one of the largest undeveloped copper and gold projects in North America.
The initial capital cost (capex) estimated for the project is $1.074bn. It encompasses mining, process plant, and infrastructure costs along with indirect costs and a contingency of $89.3m.
Besides, the FS projected an after-tax net present value (NPV) of $884m for the Canadian gold-copper project. It will also have a post-tax internal rate of return (IRR) of 14% with an after-tax payback period of 5.7 years.
