Signal Gold (SCNL) - Doubling of Resource & $2.1B Regional Impact

Signal Gold Inc. is a TSX and OTCQX -listed gold mining and development company, focused on the advancement of its projects in Nova Scotia and Newfoundland. The company was previously known as Anaconda Mining Inc., which announced at the end of March 2022 that it would change its name to Signal Gold Inc. The name change is to reflect the near-term growth potential of the company and better reflect its commodity focus on gold.

Company Overview

The company’s Point Rousse project is a 5,794.27-hectare operation in north-central Newfoundland which Signal Gold Inc. has been mining since 2010. The company released an operational update of the project in the middle of June 2022, to address the operational challenges the project had been experiencing. The operational challenges were due to elevated Ammonia levels within the project’s Argyle open pit mine which resulted in a delay in mining activity of the pit and a reduction in the overall mining activity of the project. The company was able to return the project to normal operating conditions by treating and discharging the water through UV water treatment systems.

Signal Gold Inc. announced on the 13th of June 2022 that the Environmental Assessment for the Goldboro Gold project had been registered with the Government of Nova Scotia. The company more recently announced that it had initiated a 50 line-km Induced Polarisation geophysical survey to the west and on strike from the Goldboro deposit. The geophysical survey will extend over the area west of the project’s mineral resource estimate footprint for approximately two kilometres and will follow an existing VLF geophysical survey, which passes through the deposit. The geophysical survey will provide geophysical data to a depth of 250 m, which Signal Gold Inc. will incorporate into a planned future 10,000 m drilling program. The exploration initiatives of the company will be funded by its recently concluded private placement offering of CAD$ 6 million. 

Name change from Anaconda Mining

Anaconda Mining Inc., announced on the 12th of May 2022 that it would from that point forward be known as Signal Gold Inc. The name change was approved at the company’s Annual and Special Meeting of Shareholders. Kevin Bullock, the President and CEO of the company explains the rationale regarding the name change as follows.

“We thought it was appropriate to revamp what we’re doing because Anaconda was a name from the past, about 15 years ago it was actively looking for iron in South America. We wanted to represent what we’re doing on the east coast of Canada, and Signal Gold seemed appropriate with the lighthouse logo and Signal Hill in Newfoundland. It just represents our roots but can take us further.” 

Tilt Cove and Point Rousse Projects

The asset portfolio of the company consists of the Tilt Cove project, the Point Rousse project and its Goldboro Gold project.

The Tilt Cove project is a copper-gold exploration-stage project, located in the Baie Verte Mining District, within Newfoundland. The project holds a 5,700-hectare land position, which consists of 228 claims, 20 licences and a mining lease. The project has seen past exploration with 12 high-priority gold exploration targets identified. The highlights of the previous exploration initiatives include 6.77 g/t of gold over an intercept of 5.0 m and 11.20 g/t of gold over an intercept of 1.1 m. the project also hosts the past-producing Tilt Cove, Betts Cove and Nugget Pond Mines.

The Point Rousse project holds a 5,794.27-hectare land position and consists of 5 mining leases and 24 mineral licences. The project is located within the Baie Verte Mining District, 6 km northeast of the town of Baie Verte. Signal Gold Inc. has been mining at the project since 2010, with the total amount of gold produced in that time being approximately 118,028 ounces. The current production rate of the project is approximately 15,000 to 16,000 ounces per annum, with the company currently mining the project’s Argyle Deposit.

Point Rousse operational challenges and resolution

The Point Rousse project of Signal Gold Inc. experienced operational challenges at the end of Q1 2022. The primary challenge at the project was the elevated Ammonia levels in the Argyle pit. The elevated ammonia levels were immediately addressed by the company but led to a halt in mining activities. The halt in operations led to the operation’s mill being solely reliant on the project’s low-grade Pine Cove stockpiles. The UV water treatment plants mobilised at the project were able to address the ammonia levels, within 5 weeks, from where mining activities could be resumed. Kevin Bullock explains the challenges at the project in early 2022 as follows:

“…with Point Rousse, we had some start-up issues with a new satellite pit called Argyle, and then we had some weather issues, which created some flooding of the pit and allowed ore to be left in it for a while and those un-blasted explosives leached ammonia into the water, therefore we couldn’t discharge into the environment until we cleaned it.”

The production at the project since the resumption of mining activities at the Argyle deposit has been able to mine 30,483 tons of gold mineralisation in May 2022. The project’s mill was able to process 36,227 tons at a grade of 2.2 g/t of gold, leading to the production of 2,270 ounces of gold in May 2022. Bullock believes that the operation is back on track, he states:

“We’ve been pouring about 140 ounces per day over the last 3 weeks, so we’re doing very, very well at the site now.”

The Goldboro Project

The Goldboro Gold project is a planned open-pit, 100% owned asset of the company located near Guysborough County, Nova Scotia, Canada. The project consists of 37 contiguous claims for a total land position of 593 hectares. The project is envisioned to implement open-pit mining methodologies, with the possibility of underground mining also present. 

The company published the feasibility study of the Goldboro project at the start of 2022, the feasibility study includes highlights such as 1.1 million ounces of total recoverable gold through an 11-year life of mine (LOM) implementing open-pit methodologies. The open-pit mineral resource consists of 1,422 million ounces of gold in the measured and indicated category and 66,000 ounces of gold in the inferred category. The project also holds an underground mineable mineral resource estimate (MRE) which consists of 1,159 million ounces of gold in the measured and indicated category and 418,000 ounces of gold in the inferred category. The initial capital cost of the project (CAPEX) is set to be CAD$ 271 million with an after-tax NPV5% of CAD$ 328 million, an after-tax internal rate of return (IRR) of 25.5% and an after-tax payback period of 2.9 years.

Bullock sums up the value of the Goldboro project to Signal Gold Inc. as follows:

“Signal Gold is Goldboro going forward, and Goldboro is going to produce 100,000 ounces a year for 11 years as the first phase of just open-pit mining.”

Goldboro project Environmental Assessment and socio-economic impact

The company announced on the 13th of June 2022 that the Environmental Assessment for the Goldboro Gold project had been registered with the Government of Nova Scotia. Bullock explains that the Nova Scotian government firstly views the environmental assessment from where the local communities are engaged, he states:

“Nova Scotia is unique in that everything has to be government viewed first, and then there has to be communication with Mi’kmaq, which is the local native group.”

Bullock explains that the company has held various forums in which the local communities have had an opportunity to discuss the project and that the overwhelming majority of the community is positive regarding the Goldboro Gold project, he states:

“…what we’ve done is we’ve had 2 public meetings where anybody could come, review the project, talk to any of the senior VPs and the people involved in the project at the Goldboro site, and ask questions, and even form protests and other things. None of that happened, it was very positive. We also did a 3-hour event at the closest Mi’kmaq community with the chief and council, and with the locals. They’re all very positive about this program, so we don’t see any red flags going forward.”

The outcome of the environmental assessment is due by the end of July 2022, at which point the company will either be released from the process or will have to resubmit the environmental assessment with additional information, he states:

“…by the 31st of July, the minister of environment and climate change has to give a response. It’s either yes, we feel that this is a complete document, and you are now released from the EA process, or we feel we need more information on the following things and therefore this is not complete, please provide colour and clarity on the following things and hand in again.”

The environmental assessment of the project also includes a socio-economic study conducted, which shows a positive effect the Goldboro Gold project will have on the local community. The highlights of the study include the creation of 538 full-time jobs in the project’s two-year construction period and 215 full-time and 517 spin-off positions thereafter.  The project will also positively impact the provincial GDP with CAD$ 2.1 billion, Bullock sums the positive effect of the project up as follows:

“It’s going to create 700 jobs including direct and spin-off per year for 15 years in an area that has a population of 160. The impact is CAD$ 2.1 billion of increased GDP, and CAD$ 1.7 billion of direct spending over the life of mine of the project. That’s the single largest investment in the province, and therefore it’ll be treated very carefully.”

Signal Gold Inc. will also give its employees an incentive of CAD$ 5,000 to move to the district of Guysborough, which will further assist the local communities, he states:

“…we will actually sponsor employees, give them an extra CAD$ 5,000 if they choose to live or rent - build or rent - within the municipality of the district of Guysborough.”

Future initiatives

Signal Gold Inc. recently announced that it had initiated a 50 line-km ground geophysical survey to the west and on strike from the Goldboro deposit. The geophysical survey is aimed at identifying exploration drilling targets for future drilling campaigns at the project. The exploration initiatives of the company will be funded by its recently concluded private placement offering of CAD$ 6 million.  Bullock sums up the future initiatives of the company as follows:

“…we raised CAD$ 4 million of hard dollars, we raised another CAD$ 2 million of flowthrough, so we’re going to be doing at least a 10,000 m drill program to start and that’s just once we’ve identified proper targets with on the ground geophysics that we’re doing right now. We’ll do that targeting. Once we hit something, that’s when you raise more money through the flowthrough markets in Canada to actually drill off the new deposits that we’ll find west of the current resource.”

To find out more, go to the Signal Gold website