Troilus advances project financing with $500m German loan guarantee

Canadian development-stage mining firm Troilus Gold has taken a step forward in financing its flagship copper and gold project in Quebec, with the receipt of a letter of intent (LOI) from Euler Hermes Aktiengesellschaft, representing the German Federal Ministry for Economic Affairs and Climate Action.

The LOI confirms the in-principle eligibility for an untied loan guarantee of up to $500-million, contingent on the signing of a commercial off-take agreement with German copper smelter Aurubis. The agreement will span up to 15 years and is subject to customary due diligence, including assessments of economic, technical, environmental, and social factors.

This move represents a milestone in securing the necessary financing for the development of the Troilus project, located in the Frôtet-Evans greenstone belt in north-central Quebec. The company has indicated that the LOI is part of a broader strategy to establish a comprehensive financing package for the project. This package will be complemented by ongoing discussions with other smelting partners, export credit agencies, commercial banks, and global mining finance institutions.

Further financing announcements are expected in the coming weeks.

Troilus CEO Justin Reid said the LOI was a validation of the project’s economic potential and strategic value. "This LOI is a strong endorsement of the Troilus project’s significant economic potential and strategic value," Reid said. "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."

The Troilus project’s scale and resilience, as well as its proximity to European copper markets, have positioned it as one of the largest undeveloped copper and gold projects in North America. The project’s feasibility study, published in May 2024, outlines a 22-year, 50 000-t/d openpit operation, with an average life-of-mine production of 303 000 gold-equivalent ounces (GEOs) a year or 135.4-million pounds of copper-equivalent a year, peaking at 536 400 GEOs or 237.6-million pounds copper-equivalent a year.

The project’s compelling economic profile, coupled with strong institutional interest, has helped drive the momentum behind Troilus’ financing efforts.

The company’s financing strategy is being shaped with the assistance of Auramet International, which is helping to structure, identify, and engage potential financing participants. Troilus is working toward securing a comprehensive financing solution that will fund the construction of the project, which has become a critical component in addressing global copper and gold supply needs.