Signal Gold announces $4.0 million sale of Nfld. project to FireFly
Signal Gold Inc. [SGNL-TSX, SGNLF-OTCQX] has announced the sale of its Tilt Cove Project in Newfoundland to Australian Stock Exchange-listed FireFly Metals Ltd. [FFM-ASX] for $4.0 million in total compensation.
The announcement comes after Signal Gold recently agreed to be acquired by NexGold Mining Corp. [NEXG-TSXV] in a move that is expected to create a top near-term gold developer advancing NexGold’s Goliath Gold Complex in northern Ontario and Signal’s Goldboro Gold Project in the historic Goldboro Gold District in Nova Scotia.
With Environmental Approvals in place, the aim is to attain production of over 200,000 ounces annually.
Signal Gold shares were unchanged Monday at $0.09 and trade in a 52-week range of 17.5 cents and $0.07.
Under the share purchase agreement with FireFly Metals, FireFly will acquire 100% of the common shares of Tilt Cove Gold Corp. a unit of Signal Gold., which holds all the exploration licenses, rights and obligations related to Tilt Cove. The acquisition includes the historical Tilt Cove VMS copper-gold mine, which produced 170,000 tonnes of copper and 50,000 ounces of gold.
On closing of the transaction, which is expected by mid-November, 2024, Signal will receive $570,000 in cash and 2.32 million common shares of FireFly with a value of $2.5 million based on the 10-day volume weighted average price of FireFly shares on the Australian Stock Exchange. Signal Gold will also receive a milestone payment of $1.0 million (in shares or cash at the option of FireFly) if FireFly announces a mineral resource estimate, in any category, of at least $500,000 ounces of gold equivalent ounces at a grade of at least 1.0 g/t gold equivalent at Tilt Cove.
“We are excited to announce the sale of our Tilt Cove Project to FireFly Metals, who are well positioned to extract value from this prospective exploration-stage gold-copper project, located in the Baie Verte Mining District of Newfoundland,’’ Signal Gold said in a press release. “We believe there is tremendous potential at Tilt Cove with approximately 15,000 hectares of prospective mineral lands and 35 kilometres of high-potential strike length, including the Nugget Pond Horizon, and this transaction provides strong upside to our shareholders through our position in FireFly, while we focus on the advancement of the Goldboro Project in Nova Scotia.’’
Signal is advancing the Goldboro project subject to a positive feasibility study which envisages an 11-year open pit mine life with average gold production of 100,000 ounces annually and an average diluted grade of 2.26 g/ gold. The project is located on tidewater, approximately 185 kilometres northeast of Halifax.
A 2021 Goldboro feasibility study is based on maiden open pit probable reserves of 1.15 million ounces of gold and a mill capacity of 4,000 tonnes per day. The study pegged the initial capital cost at $271 million and life of mine sustaining capital at $63.1 million.
The study envisages the creation of 345 direct full-time jobs during construction and 215 full-time jobs will the mine is in operation, generating $226 million in federal and provincial tax payments.