Triumph Gold’s Gold-Rich ‘Blue Sky Zone’ Continues to Prove Economic

Palisade Research September 12, 2018
Category: Research

JUST RELEASED: Hole RVD18-19 returns 316.00 meters of 1.79 g/t Gold Equivalent, including 79.75 meters of 3.34 g/t Gold Equivalent with 2.5 g/t Gold and 0.38% Copper. . .

This has confirmed continuity of grade, the high-grade nature of the body and that it is open in all directions.

 

Triumph Gold Corp (TSX-V:TIG, OTC:TIGCF)

Share Price: C$0.75

Shares Outstanding: 78.4M

Market Capitalization: C$58.8M

Cash: C$5.6M

Total Liabilities: C$1.5M

 

A geologist in the field is about as likely to discover a porphyry deposit as a tourist in New York City is to spot a Starbucks.

Pulling from geology 101, a porphyry deposit is simply an ore-body that forms from hydrothermal fluids – originating from volcanic magma chambers that are kilometers below the surface – and are a pretty common occurrence in the world of geology.

Economic porphyries, however, are one of the most sought after structures – they are truly rare.

Large, consistent tonnage and strong grade rarely occur in tandem. But when they do, they act as a utility – providing 30-50% profit margins over a 20-30 year mine life – sometimes even more.

Utilities like these attract cheap-debt and huge pools of low-risk capital – exactly the type of asset that a major mining company dreams of. And when majors are able to acquire such high-margin, long-term and cash flowing assets, they can in turn attract pension funds, sovereign wealth funds, and hedge funds as serious investors.

So, what makes an economic porphyry?

Most porphyry mines are low grade – compensated by their enormous sizes – and in some cases have hundreds of millions of ore tonnage.

For instance, in Canada, half of all copper and all molybdenum production comes from porphyry deposits – such as: the Valley Copper Mine averaging 0.28% copper; Gibraltar Mine averaging 0.26%, and Copper Mountain at 0.34%.

But in very rare cases, porphyry deposits can be ultra-rich with excellent grades.

And this looks like the case with Triumph Gold. . .

Triumph’s Blue Sky Zone was first identified in 2016, when the company focused their exploration efforts on a six-kilometer-long, multi-element soil and geophysical anomaly. Initial drill results demonstrated host rock indicative of a major porphyry system.

Goldcorp (TSE:G, NYSE:GG) – the $7 billion gold mining juggernaut – took note and bought up 19.999% of the company in 2017. Then in mid-2018, Zinjin Mining – a $70 billion Chinese backed mining conglomerate – joined in and bought up 10% of Triumph.

Both companies see what the market is just now picking up on. . .

And that’s the potential for a high-grade, gold rich porphyry project that’s located in a mining friendly jurisdiction – equipped with solid infrastructure (which includes a government maintained highway that runs through the project).

 

Today, Triumph announced three new holes from their Blue Sky Zone.

These holes have further delineated the zone and confirm that mineralisation is broad and extensive.

As a recap, previous results from this campaign included RVD18-17 – which contained 202.10 meters of 0.87 g/t gold, 5.8 g/t silver, 0.25% copper and 0.01% molybdenum.

We thought this was excellent – especially since this hole was not even in the bornite rich core, which typically yields the highest grades in these porphyries.

But this time – Triumph’s hit it big. . .

Hole RVD18-19 totals a massive 565.6-gram meters gold equivalent (or 344.44 meter % copper equivalent). This is not only one of the longest and highest-grade porphyry intercepts at Blue Sky – but also in the entire Yukon.

This intercept is significant as it shows the extent of this ore body, and most importantly, the continuities in grade down hole. This is clearly not a ‘spotty’ deposit.

The main intercept is 316 meters that’s grading 1.101 g/t gold, 0.27% copper, 5.0 g/t silver and 0.02% molybdenum. This equals 1.79 g/t gold equivalent and 1.09% copper equivalent.

Within that, there’s 79.75 meters grading 2.481 g/t gold, 0.378% copper, 6.9 g/t silver and 0.017% molybdenum – equaling 3.34 g/t gold equivalent and 2.03% copper equivalent. This is a large intercept that’s a lot higher-grade than your typical porphyry deposit – in Canada or elsewhere.

Hole RVD18-19 also appears to have successfully targeted a high-grade shoot within the main porphyry body.

Other holes released today include RVD18-20, which returned 110.50 meters at 0.452 g/t gold, 0.188% copper, 3.7 g/t silver and 0.004% molybdenum – this equates to 0.85 g/t gold equivalent and 0.51% copper equivalent, aswell as 93.925-gram meters gold equivalent.

Hole RVD18-21 returned 83.50 meters at 0.704 g/t gold, 0.137% copper, 7.1 g/t silver and 0.003% molybdenum – this equates to 1.04 g/t equivalent and 0.63% copper equivalent; aswell as 86.84-grams meters gold equivalent.

Therefore, in the world of porphyries, Triumph’s grades are prolific

 

So far, we can confirm a footprint of 150 meters x 180 meters by 300 meters of mineralization. The deposit remains open in all directions and at depth.

Triumph’s yet to drill into the bornite – which is found at depth and typically yields the highest grade. . .

 

Now, where does Triumph go from here?

 

Since Triumph closed at C$0.59 on August 20 – the stock has traded almost 8 million shares.

And of the shares outstanding, 51.8 million are controlled by long-term institutional investors and insiders – giving the company a mere float of only 26.6 million.

What this means is that Triumph has built serious support at levels above C$0.60.

Thus, the downside risk is minimal. And just as the Blue Sky Zone is living up to its name – Triumph’s looking nowhere but up.

Triumph Gold is building on this initial success at Blue Sky by bringing in porphyry and structural experts to digest the current results and assist in planning the next stage of exploration to further delineate the ore body.

This is very much a dynamic exploration scenario, led by a great team who will further delineate this body, understand its geometry and explore all its extents.

John Newell – a fund manager and shareholder of Triumph – has been tracking the company since the early days. And so far, his price targets have been spot on.

His next target’s $1.25 – with $2.50 to follow.

Results from this season’s drilling campaigns are just starting to be released. And the Blue Sky Zone’s just one of several high-priority targets pinpointed and tested by Tony Barresi – Triumph’s V.P. of Exploration – who is quickly becoming a superstar in the business.

 

Palisade Global Investments Limited holds shares of Triumph Gold Corp. We receive either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate. The information contained in such write-ups is not intended as individual investment advice and is not designed to meet your personal financial situation. Information contained in this report’s from sources we believe to be reliable, but its accuracy cannot be guaranteed. The opinions expressed in this report are those of Palisade Global Investments and are subject to change without notice. The information in this report may become outdated and there is no obligation to update any such information. Do your own due diligence.

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