Hedge funds slash bullish wagers on gold over Trump election win
The precious metal has fallen about 8% from a record high on Oct. 31, with losses accelerating after Trump’s election victory last week.
Signal Gold (TSX: SGNL) said on Thursday it has begun evaluating potential strategic alternatives to advance its flagship Goldboro project in Nova Scotia. BMO Capital Markets will act as the company’s financial advisor in the process.
Goldboro is an advanced-stage gold project located in Guysborough county. To date, Signal has progressed the project through several permitting milestones, with the most recent being the environmental assessment approval in August 2022.
Applications for the key remaining permits have all been submitted, and the company said it remains committed to working to obtain these permits within the next 12 months.
At the same time, Signal’s exploration team continued to grow the mineral resource at Goldboro. It now has measured and indicated resources of 1.42 million oz. (15.7 million tonnes at 2.82 g/t gold) for the open pit, and 1.16 million oz. (5.9 million tonnes at 6.09 g/t gold) underground.
A 2021 feasibility study on the project demonstrated an approximate 11-year life of mine with average gold production of 100,000 oz. per annum and an average diluted gold grade of 2.26 g/t.
Its after-tax net present value, discounted at 5%, is pegged at C$328 million, with an internal rate of return of 25.5% and projected payback of 2.9 years. The initial capital cost is estimated C$271 million, and the life-of-mine sustaining capital is C$63.1 million.
Still, this “robust, high-grade project with significant leverage in an increasing gold price environment” is being substantially discounted, Signal said in its media release, adding the company is “focused on being capital efficient, with an emphasis on minimizing shareholder dilution and maximizing value.”
“Signal Gold recognizes that a larger, better capitalized, or cash flow generating company could be better positioned to advance or assist in the advancement of Goldboro over the development timeline,” it said.
Shares of Signal Gold shot up 11.7% to C$0.095 by 10:40 a.m. in Toronto. Over the past 52 weeks it traded within a range of C$0.08-C$0.35 The gold junior has a market capitalization of C$23.9 million ($17.7m).
2 Comments
truethat
When did they get up to 1.42 MOZ for open pit? Wasn’t it 1.1 MOZ? The capital costs? When were they calculated?
As far as the price shooting up 11.7%. The stock traded the day before at .09, then a last minute trade at .085. The day of the announcement, about 600 000 shares traded at .09, then a late trade at the end of the day was at .095.
The beginning of the week, there was over a half million bid at .10. So saying it shot up 11% is a bit of a stretch.
Jackson Chen
Hi there, the numbers for mineral resources were taken from the company’s website: https://www.signalgold.com/operations-projects/mineral-reserves-and-mineral-resources-estimate
The stock prices only reflected what they traded at at presstime.