Signal Gold raises $5.02 million in challenging market

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Signal Gold Inc. [SGNL-TSX, SGNLF-OTCQX] said it has upsized and completed a previously announced non-brokered private placement worth $5.02 million. Proceeds will be used to support ongoing growth exploration at the company’s Goldboro gold project in Nova Scotia.

The offering consists of 13.8 million units priced at 15 cents per unit and 17.35 million flow-through units priced at 17 cents per unit. Each unit consists of one common share and one-half of one common share purchase warrant. Each flow-through unit consists of one common share, which was issued as a flow-through share (as defined under the Income Tax Act (Canada), and one half of one warrant, issued on a non-flow-through basis.

The company said it raised $5.02 million after closing the final tranche of the offering, which generated gross proceeds of $2.49 million from the sale of 13.8 million units and 2.47 flow through units.

“We are pleased to have received further significant institutional interest for the offering in what continues to be a challenging market,’’ said Signal President and CEO Kevin Bullock. He said proceeds will support ongoing growth exploration at the Goldboro project and the broader Goldboro gold district in 2024 as well as the progression of key project permits.

Signal Gold eased 3.7% or $0.005 to 13 cents. The shares trade in a 52-week range of 42.5 cents and 11.5 cents.

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.

Back in August, 2022, the Goldboro project received its environmental assessment approval from the Nova Scotia Minister of Environment and Climate Change, a significant regulatory milestone which enables the company to commence site-specific permitting processes, including the Industrial Approval, and Crown Land Lease and Mining Lease applications.

At a gold price of US$1,760 an ounce, Goldboro could generate cumulative after-tax net cash flows of approximately $684 million, an after-tax NPV 5% of over $442 million and an after-tax IRR of 31.7%.

The company has said it sees the potential for resource expansion of resource expansion, particularly towards the west with further exploration of a 1.5-kilometre area along strike from the existing Goldboro deposit towards the past-producing gold mine at Dolliver Mountain.

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