Signature Resources (SGU) - Red Lake Turnaround & Growth Story

Signature Resources Ltd. is an advanced-stage exploration company looking to expand the Lingman Lake Gold deposit. The company was founded in 2010 and is based out of Canada. The company is listed on the Toronto Stock Exchange (TSX-V: SGU), The Frankfurt Stock Exchange (FSE: 3S3), and the OTC Markets (OTCQB: SGGTF). The company's core values are discipline, execution, and integrity, which are also reflected in its logo.

We met with Robert Vallis, Director, President, and CEO, Signature Resources, who joined us from Toronto, Canada. Robert is a mining executive with strong technical and business experience in corporate development, strategy, planning, project management, financial management, and mine engineering operations. 

Company overview

Signature Resources is a high-grade Canadian gold exploration firm focused on expanding its discoveries and land packages. The company was founded in 2010. Cool Minerals Inc. is a subsidiary of the company.

The Lingman Lake Gold Project is a historical resource that was discovered in the late 1940s. The site was in stasis for about 40 years under private ownership and court disputes. 

The Lingman Lake Gold Project

Located in north-western Ontario bordering Manitoba, this is a high-quality asset with 234,000oz deposits in the northern Red Lake district. The company's claims span 90% of the Lingman Lake Greenstone Belt and offer a district potential.

This resource is world-class as it offers mesothermal, high-grade, high-density ounces that are un-deformed and near the surface. The company recently concluded a 3,000m initial drill program and is currently looking to step out and expand the scale of discovery. Eventually, the company intends to achieve a 43-101 compliant resource along with large-scale expansion.

In 2018, this resource had a twin hole drilling operation with 22 drill holes along with several re-assays were performed at the historic core. A large majority of the core exists in pristine conditions and the initial results have shown a 94% correlation.

Based on the datasets, the existing twin holes feature a shaft with 3 sub-levels where 4 500lb bulk samples have been historically extracted. These samples were graded at 19g/t while the vertical rise of 100ft (30m) in diameter was graded at 28g/t along the length. The surface offers rich mineralization and is delineated down to 180m.

Capital Raised

When Robert initially joined Signature Resources, the company had a $7M market cap with $2M in debts. Over time, the company was able to raise $3M over a course of several months, out of which the first $1M was raised within 4 days of Robert joining the company. An additional $1M was raised within the 2 weeks that followed.

The $4M raised capital made the company fully funded for their first drill campaign that began operations in March 2021. The company worked towards clearing out its existing debt and moved towards the development of a camp to carry out drilling operations. The company was able to grow its market cap from $7M to $35M - $40M range. 

In 2013, John Leliever, Founder, Advisory Consultant, Signature Resources added The Lingman Lake Gold Project to the company's portfolio. 

The factors paramount in bringing this resource to light was the fact that it's a high-quality asset in a mining-friendly jurisdiction and that the company has 90% claims across the entire Greenstone belt. The team and the advisory board have been able to provide cross-functional support across geology, mine building, metallurgy, and capital markets.

The company is focused on bringing more visibility to its flagship site through its marketing pursuits. They seek to bring the site into production while maintaining reliability and de-risking the project. This also includes the purchase of a diamond mining rig.

The company is looking to further expand its financial capabilities, focusing on the next stage of drilling and data collection. The company's goal is to bring value to the shareholders with responsibility. They are currently in the process of acquiring a second drilling rig.

The Drilling Program

The initial drill campaign began in March and was able to achieve 3,000m. The company intends to reach a 10,000m drilling target by this fall while expanding the breadth and depth of the existing historic resource. Alongside the drilling operations, the company is looking to advance its regional exploration packages as it offers the potential for a district-wide land package. 

Signature Resources is currently in the process of carrying out aerial geophysical surveys, LiDAR analysis, and IP (Induced Polarity) 3D program across the entire site.

This program will penetrate the ground at a 500m depth across a 3km area in the east-west region and 1km in the north-south region. The collected data will provide additional insights into the existing 28,000m drilling and provide an efficient approach towards the next drilling program. The site has a historic resource of 234,000oz at the surface.

The company is growing its dataset along with the ounces and looking to function in a modern 43-101 compliant environment. The early-stage metallurgical test work is scheduled for the end of 2021. 

Resource Allocation

Signature Resources is looking to drill for scale in order to grow the resource and add additional supply to the output. They intend to drill for the scale within 50m - 100m range at depth, strike parallel and attack the ground on both breadth and depth. The mesothermal deposits at this site run several kilometers deep within the surface.

Currently, the company has reached 180m depth at the surface to determine the extent of the mineralization, eventually looking to move towards infilling.

The company is currently in the process of generating its first drill results and geophysics report. The remainder of drill assays is scheduled within a month. The dataset is projected to explore a depth of 500m and the company expects a rise in the material grade. The company is approaching the drilling program with a data-driven approach to formulating a roadmap to ensure that the shareholder funds are utilized responsibly. 

A World-Class Team with Shared Philosophy

The team at Signature Resources shares the core philosophy of discipline, execution, and value generation to provide steady growth and a sense of direction. The team has stock options as part of their compensation as they understand that there is a strong growth opportunity within the landscape.

Paolo Lostritto is the Chairman of the Board at Signature Resources. He has extensive experience in the mining capital markets. Paolo is also the Co-founder and a Board Member at Interstellar Mining Inc.

Robert Vallis has worked at Hemlo Operations as a mining engineer for over 8 years and has a strong background in mesothermal deposit exploration.

The company also added Rickardo Welyhorsky to the advisory board. Rickardo specializes in mine building and metallurgy. He has a working history on projects including Detour and Cerro Moro. He has also built multiple mines for Barrick Gold. Additionally, he has extensive experience working with firms in the diamond industry. His skill set also includes project development and management.

Dan Denbow CFA, Signature Resources has over 28 years of experience in capital markets and is currently managing $1Bn worth of assets for the company. 

Walter Hanych is the Chief Geologist and Director at Signature Resources, who is also part of the company's founding team. The company also has 2 world-class geologists on board that includes an ex-BMO analyst.

Signature Resources plans to become a resource developer by utilizing the existing historical data and exploration pursuits. The company's focus is to responsibly discover, grow and pass on the resource.

To find out more, go to the Signature Resources Website.