Troilus Gold, a Canadian mineral exploration and development company, has reached an agreement on indicative commercial offtake terms with Aurubis, a global copper smelter headquartered in Hamburg, Germany. The agreement covers the copper-gold concentrate expected to be produced from Troilus’ project in north-central Quebec, Canada. This development helps to underpin the project’s financial profile as it progresses toward securing a broader debt financing package of up to $700 million.
Offtake Agreement Supports Project Financing
The indicative offtake terms provide commercial clarity, outlining specifications for the concentrate, precious metals payabilities, treatment and refining charges, and applicable penalties for deleterious elements. Metallurgical test work and historical data from the past operation of the Troilus mine indicate that the concentrate quality is expected to meet the outlined thresholds, potentially minimizing additional penalties. Such agreements are a standard component in the mining sector, contributing to revenue predictability for producers and ensuring raw material supply for smelters.
Justin Reid, CEO of Troilus Gold, stated that the agreement with Aurubis marks a development reflecting the anticipated quality of concentrate from the project. This partnership is expected to contribute to long-term planning security for both entities and is a component of Aurubis’s raw material sourcing strategy.
Financing Package Backed by International Institutions
The final binding offtake agreement is expected to be executed in connection with the completion of the project’s comprehensive debt financing package, which is structured for up to $700 million. This substantial financing effort is being managed by a syndicate of global financial institutions, including Société Générale, KfW IPEX-Bank, and Export Development Canada.
Further underpinning the project’s financial framework is the support from Germany. Euler Hermes, representing the German Federal Ministry for Economic Affairs and Climate Action, has issued a letter of intent for up to $500 million, confirming the project’s in-principle eligibility for an untied loan guarantee. This support suggests Germany’s interest in securing raw materials for European supply chains.
The Troilus Project: A Copper-Gold Development in Quebec
The Troilus Project is situated in north-central Quebec. The site is a past-producing mine that operated from 1996 to 2010. Troilus Gold’s May 2024 Feasibility Study projects an annual average production of approximately 135.4 million pounds of copper equivalent, or 75,000 wet metric tonnes of concentrate. This concentrate is expected to yield payable metals, including copper, gold, and silver.
The project benefits from existing infrastructure, such as provincial hydroelectric power lines and an all-season road, leveraging assets from its previous operational phase while incorporating updated mining and processing techniques for recovery and efficiency.
Copper and Gold Market Context
Copper demand is robust, primarily driven by global electrification trends, rapid expansion of renewable energy infrastructure, and general industrial development. Prices for copper have remained elevated due to persistent supply constraints and strong demand signals. Gold, as a precious metal, maintains demand from investment, jewelry, and technological applications, influencing the overall value of the concentrate. Both metals are critical components in the ongoing global energy transition, making projects like Troilus strategically important for future supply.
Company Background and Market Context
Troilus Gold is a Canadian-based mineral exploration and development company focused on the re-establishment of the Troilus property as a gold-copper producer in Quebec’s mining region. Its strategy capitalizes on the project’s large resource base and existing infrastructure.
Aurubis is one of the world’s leading integrated copper groups and the largest copper recycler outside of China. Headquartered in Hamburg, Germany, Aurubis produces refined copper and a wide range of copper products from diverse raw materials, including copper concentrates and scrap metal. The company’s market role involves supporting stable supply chains through its capabilities in recycling and refining.
Export Development Canada (EDC) is Canada’s official export credit agency, providing financial solutions and risk management services to Canadian companies doing business internationally. Société Générale is a major French multinational investment bank. KfW IPEX-Bank is a German development bank specializing in project and export finance, often supporting German and European economic interests abroad.
