Troilus Gold Corp. (TSX: TLG; OTCQX: CHXMF; FSE: CM5R) has taken a significant step forward in its plans to bring the former Troilus Mine in Quebec back into production. The company recently announced it has secured a $35 million loan facility from Auramet International, a move that will provide the financial flexibility needed to push ahead with key pre-development activities.
The new loan is structured to be non-dilutive, meaning it won’t immediately impact existing shareholders by issuing new equity. Instead, Troilus will use this capital to finalize permitting, begin early site works, and continue its march toward full project financing for the large-scale mining operation it envisions in the Frôtet-Evans Greenstone Belt.
The company’s CEO, Justin Reid, emphasized that this facility, combined with Troilus’s existing cash and the expected inflow from more than $16 million in in-the-money warrants, strengthens the company’s financial position. Reid noted that the loan offers a lower cost of capital compared to other alternatives, such as issuing more shares, and allows Troilus to move quickly on early project milestones. He also highlighted Auramet’s ongoing role as a key advisor, saying their involvement aligns their interests with those of Troilus and its stakeholders as the project advances toward its next phase.
The loan has an initial term of one year and will be drawn down in tranches. Troilus has already received an initial advance of $15 million, with the remaining $20 million available for drawdown after 90 days, provided certain conditions are met. The loan carries a monthly interest rate of 1.0% on the outstanding balance, and Troilus can repay it early without penalty. If needed, the company can extend the loan for an additional six months, though the interest rate would rise to 1.25% per month during that period.
To secure the loan, Troilus granted Auramet a negative pledge on its assets and a security interest in its personal property. The arrangement also includes the issuance of 5 million warrants to Auramet, allowing them to purchase Troilus shares at a 10% premium to the recent average trading price. If Troilus draws the second tranche, Auramet will receive another 5 million warrants under similar terms. Should the company opt to extend the loan, an additional 10 million warrants could be issued, subject to stock exchange approval.
Auramet International is no stranger to the precious metals industry. As one of the world’s largest physical precious metals merchants, the company boasts annual revenues exceeding $25 billion and a team with more than 350 years of combined industry experience. Auramet has also been acting as Troilus’s senior advisor on project financing, further deepening the relationship between the two firms.
Troilus Gold Corp. is focused on redeveloping the former Troilus Mine, which sits on a 435 square kilometer land package in Quebec’s Frôtet-Evans Greenstone Belt. The company’s 2024 Feasibility Study outlines a 22-year open-pit mining operation capable of processing 50,000 tonnes per day. This positions Troilus as a major potential contributor to North America’s gold and copper supply, especially as mining jurisdictions in Quebec continue to attract investment due to their stability and supportive regulatory environment.
With this new loan facility in place, Troilus is positioned to make meaningful progress on its permitting and early development work while keeping shareholder dilution in check. The company’s ability to secure a sizable, flexible facility at a competitive rate speaks to both the attractiveness of the project and the confidence of its financing partners.
