Troy Resources – Keeping Moving
Troy Resources shows how being a small, but nimble company can allow them to thrive in even the most hostile conditions.
Troy Resources has been in existence since 1987, one of the longest surviving mining companies in the class of small to medium capacity producers. Over the last 30 years, the company has gone from pure exploration to production in Australia, to international mining projects in South America.
“We’re a long-standing small to medium-sized mining company with a head office in Western Australia. We’ve been operating in South America since 2003 and have had several mining operations over the years,” explains Ken Nilsson, CEO and Managing Director of the firm.“Our modus operandi over the years has been to keep costs fairly low by using well-restored good second-hand equipment.”
The company was one of the lowest-cost gold producers in the world when it moved into South America. They’ve maintained a presence in Brazil ever since, even though they currently don’t have an operating mine there. However, during their time in the country Troy has operated several mines and open pits, favouring relatively small, short life projects, remaining mobile so that they were able to move onto other opportunities.
In recent years they have closed the Andorinhas operation in Para state, and are now concentrating on the Karouni project in Guyana. Troy Resources has been operating this project since 2013
and it’s now in production, with the mine’s current reserves expected to be used up by the middle of next year. But Troy Resources is looking to significantly extend that life-of-mine through a combination of conversion and extensional exploration alongside the development of the Ohio Creek project.
“The company was founded in 1987 and I’ve been with them for 20 years,” Nilsson says. “My background is in chemical engineering and mining engineering. We were a very basic exploration company that has progressed a long way over the years. We currently produce 60 to 70,000 ounces a year and I’d expect that to remain at those levels and grow back to 100,000 ounces a year”
Troy Resources’ history in South America has seen them producing gold and silver for 17 years, constructing four processing plants, nine open pits and two underground mines, including the Casposo mine and plant in Argentina, a 70% stake in which has been sold to another Australian/Argentinean company.
Right now the company cutting back their Smarts 3 pit, with plans to return to a high-grade mill feed soon. These efforts are part of the Karouni project which includes 2 main areas and 9 internal and external pits in total.
TAKING ON THE CHALLENGE
The common thread throughout all of these projects is that Troy Resources takes on a variety of projects and isn’t afraid to take on a challenge, but at the same time they’re not acting without a sensible amount of caution.
“We’ve never really picked any easy targets,” Nilsson admits. “But at the same time, we’re quite small and unwilling to take unnecessary risks. In terms of fast-tracking the building and start of operations we have a strong reputation.”
The challenging path that Troy Resources has taken frequently pays off. At the Karouni Mine, we are now starting to apply advanced technology, including drones, to save time and assist in the operations. This is a huge boon in the company’s efforts to identify terrains to explore and widen their profit margins.
Challenges such weather and differences in culture may have a strong impact on operational and construction activities in South America. Mining conditions in Guyana and Brazil can be hugely
impacted by the wet season. “We’ve taken on a very steep learning curve coming from a relatively dry environment in Argentina to something between two and three metres a year in rainfall in Guyana,” Nilsson says.
However, Nilsson believes that any challenges can be overcome with a positive outlook, and while he won’t deny the industry is tough, it’s also been rewarding over the last 20 years.
“We do very fast development at relatively low cost, offering quality and high reliability in an environment that’s sometimes is exceedingly hostile. We’ve tackled a lot of very difficult prospects
over the years,” he says. “But we used to pay dividends in the past and this is obviously part of the path going forward.”
Today Troy Resources is looking to complete their current exploration plan, making the most of their current resource base of close to a million ounces. We hope to get to a reserve base of around 300,000 ounces over time in Guyana as a start
A HOPEFUL OUTLOOK
Of course, achieving these needs people with the right skills. Fortunately, Troy Resources has built itself a strong talent pool over the last couple of decades.
“We’ve managed to train and retain a lot of people in South America,” Nilsson tells us. “Some of them we’ve managed to retain for 15 or 20 years.” He’s optimistic about what they will be able to achieve.
“We’re now looking at assets we discarded in 2016. For instance, we have an underground position we just can’t use right now, but we want to improve it,” Nilsson says.
“Going from here we’re looking to extend the mine life of our operational assets by a couple of years. We’re now looking for people who want to invest in a mining company with ongoing operation and very high-quality exploration.”
As well as investors, Troy Resources is also looking into potential new partners through mergers and acquisitions. “This is something we’re developing at the moment. I’m looking at a couple of propositions in terms of mergers and joint ventures because we have certain skills that developers would want access to,” Nilsson points out. “The flexibility we have is highly prized.”
One thing that comes across strongly, talking to Nilsson, is his enthusiasm for the real nitty-gritty of the work.
“We build things. I build something and when it runs well I’m happy,” Nilsson says simply. Of course, often the business end can get in the way of that. “I was propelled back into the role of CEO
which puts a little constraint on the amount of other work you can do. I’d like to get our production up to 100,000 ounces. Going further out I think it’s inevitable that we need to look at our own structure, management and directors and what our targets should be. We’ve eyes on a number of good propositions.”