Signal Gold Announces 2024 Second Quarter Results

Rhea-AI Summary

Signal Gold Inc. (TSX:SGNL)(OTCQB:SGNLF) reported its Q2 2024 financial results, highlighting progress on the Goldboro Project. Key developments include:

1. $644,292 invested in Goldboro, focusing on permits and exploration.
2. Completed a 5,179-metre drill program, revealing high-grade gold mineralization.
3. Granted a 20-year Mineral Lease for Goldboro in July 2024.
4. Advanced permitting process and regional exploration.
5. Reported a net loss of $23,016,546, primarily due to a $25,000,000 impairment charge on exploration assets.
6. Cash balance of $6,626,925 and working capital deficit of $20,340,231 as of June 30, 2024.
7. Actively considering options for the existing Credit Facility with Nebari.

Positive

• Granted a 20-year Mineral Lease for the Goldboro Project
• Completed 5,179-metre drill program revealing high-grade gold mineralization
• Progressed permitting process for Goldboro Project
• Expanded regional exploration activities
• Reduced corporate administration costs by 40% compared to Q2 2023

Negative

• Reported net loss of $23,016,546 in Q2 2024
• $25,000,000 impairment charge on exploration and evaluation assets
• Working capital deficit of $20,340,231 as of June 30, 2024
• Credit Facility classified as current liability, maturing in February 2025
• Increased finance expense due to higher interest rates

TORONTO, ON / ACCESSWIRE / July 31, 2024 / Signal Gold Inc. ("Signal Gold" or the "Company") (TSX:SGNL)(OTCQB:SGNLF) is pleased to report its business and financial results for the three and six months ended June 30, 2024 ("Q2 2024"). The condensed interim consolidated financial statements and management discussion and analysis documents can be found at www.sedarplus.com and the Company's website, www.signalgold.com. All dollar amounts are in Canadian dollars unless otherwise noted.

"Signal Gold remains committed to advancing the Goldboro Project to become the next fully permitted, construction ready, gold project in Canada. The Company continues to evaluate potential strategic alternatives with its financial advisor to advance the Goldboro Project and is actively considering its options with respect to the existing Credit Facility with Nebari. In the meantime, Signal Gold continues to focus on the creation of value through exploration initiatives, such as the successful drilling of the western extension of Goldboro and exciting regional work at the Stewart and Fowler targets, in addition working to obtain all remaining key Goldboro Project permits, having recently been granted the Mineral Lease for Goldboro."

~ Kevin Bullock, President and CEO, Signal Gold Inc.

Highlights for the Period Ended June 30, 2024

• Invested $644,292 in the Goldboro Project during the second quarter of 2024, relating to the advancement of project permits, exploration drilling at the western extension of the Goldboro Deposit, and regional exploration over its expanded land position in the Goldboro Gold District.

• Completed a 5,179-metre drill program on the western extension of the Goldboro Deposit to follow-up on the 2023 discovery of near-surface, high-grade gold mineralization. Initial assay results indicate that the first four drill holes have intersected multiple high-grade zones of gold mineralization along with 41 occurrences of visible gold, confirming the potential to delineate additional open-pit Mineral Resources.

• Was granted a Mineral Lease for the Goldboro Project in July 2024 from the Government of Nova Scotia with a 20-year term, in accordance with the Mineral Resources Act and Mineral Resources Regulations.

• Progressed permitting through various monitoring plans and addressing regulator feedback on the Fisheries Act Authorization and Industrial Approval application, which were submitted in 2023. The Company entered the Duty to Consult phase for the Fisheries Act Authorization and Schedule 2 Amendment of the Metal and Diamond Mining Effluent Regulations, both of which were available for public comment up to July 27, 2024.

• Commenced regional exploration work on the Fowler Target, located along strike to the east of the multi-million-ounce Goldboro Deposit, where geological mapping and geophysics indicates that the geological sequence which hosts Goldboro, may resurface eight (8) kilometers east in the Fowler area.

• Identified further growth targets at Hurricane and Armstrong, each located within major regional geological trends coincident with several historic mining operations and defined by coincident magnetic and very low frequency ("VLF") electromagnetic geophysical responses.

• Completed a 1,250-line kilometre airborne magnetic and VLF electromagnetic survey over its recently expanded exploration land position immediately north of, and contiguous with, the Goldboro Deposit, known as the Stewart Target, which highlighted numerous high-quality targets for gold discovery.

• Net comprehensive loss from continuing operations for the three months ended June 30, 2024 was $23,016,546, or $0.09 per share compared to a loss of $4,097,669, or $0.02 per share, for the comparative period of 2023, resulting primarily from an impairment charge of $25,000,000 on its exploration and evaluation assets (discussed below) and a higher finance expense, partially offset by lower corporate administration costs and a higher deferred income tax recovery.

• Ended the second quarter of 2024 with a cash balance of $6,626,925 and working capital deficit* of $20,340,231, which reflects the classification of the Credit Facility (defined below) to current liabilities.

* Refer to Non-IFRS Measures Section below. Non-IFRS financial measures are not standardized financial measures under the financial reporting framework used to prepare the financial statements and may not be comparable to similar financial measures disclosed by other issuers.

As of June 30, 2024, management assessed whether there were any indicators of impairment relating to exploration and evaluation assets, such as facts and circumstances which suggested the carrying amount exceeded the recoverable amount. While all exploration and evaluation assets remain in good standing and the Company continues to incur expenditures on exploration programs across its licences, given the continued evaluation of strategic alternatives and the prolonged decline in market capitalization of the Company, management performed an impairment assessment, considering various market valuation metrics for comparable junior mining companies with development-stage assets in determining a recoverable amount of the exploration and evaluation assets, As a result, the Company recognized an impairment charge of $25,000,000 on its exploration and evaluation assets during the period ended June 30, 2024.

Consolidated Results Summary **

Financial Position ($)		June 30, 2024				December 31, 2023
Cash and cash equivalents			6,626,925				9,851,672
Working capital (deficit)*			(20,340,231	)			(4,556,223	)
Total assets			68,487,251				95,331,016
Non-current liabilities			524,459				27,980,457

	Three						Three				Six				Six
	months ended						months ended				months ended				months ended
Financial Results ($)		June 30, 2024				June 30, 2023				June 30, 2024				June 30, 2023
Corporate administration costs			878,761				1,469,667				1,765,002				2,890,401
Share-based compensation expense			511,713				297,619				900,735				453,304
Finance expense			1,244,638				1,095,663				2,451,157				1,826,633
Depreciation			58,088				73,445				122,138				135,531
Impairment of exploration and evaluation assets			25,000,000				-				25,000,000				-
Loss (gain) on revaluation of investments			114,851				-				(124,851	)			-
Loss on equity accounted investments			21,412				10,883				47,860				18,472
Other expense (income)			56,083				(209,608	)			312,753				(398,624	)
Loss before tax from continuing operations			27,885,546				2,737,669				30,474,794				4,925,717
Deferred income tax (recovery) expense			(4,869,000	)			1,360,000				(4,963,000	)			2,065,000
Loss from continuing operations			23,016,546				4,097,669				25,511,794				6,990,717
Loss from discontinued operations			-				473,429				-				375,219
Net loss and comprehensive loss ($)			23,016,546				4,571,098				25,511,794				7,365,936
Net loss per share - basic - From continuing operations - From discontinued operations			0.09 0.09 0.00				0.02 0.02 0.00				0.10 0.10 0.00				0.04 0.04 0.00
Net loss per share - fully diluted - From continuing operations - From discontinued operations			0.09 0.09 0.00				0.02 0.02 0.00				0.10 0.10 0.00				0.04 0.04 0.00

*Refer to Non-IFRS Measures section below.

** The assets and liabilities of Point Rousse were derecognized from the statement of financial position upon completion of the sale in the August 2023, and the related operating results and cash flows have been presented as discontinued operations in the consolidated statements of loss and cash flows for the three and six months ended June 30, 2023.

Review of the Three Months Ended June 30, 2024

Corporate administration costs in the second quarter of 2024 were $878,761 compared to $1,469,667 in the comparative period of 2023, a 40% decrease reflecting the significant reduction in costs implemented by the Company. During the second quarter, the Company was focused on its strategic review process, marketing and communications, and permitting of the Goldboro Project. The depreciation charge of $58,088 during Q2 2024 primarily reflects amortization of the Company's corporate office space.

The Company recognized an impairment of $25,000,000 on its exploration and evaluation assets in the second quarter of 2024, which has been allocated on a pro-rata basis to the Goldboro Project and the Tilt Cove Project. As the Company continues to evaluate strategic alternatives and given the prolonged decline in market capitalization of the Company, management performed an impairment assessment, considering various market valuation metrics for comparable junior mining companies with development-stage assets in determining a recoverable amount of these assets.

Finance expense for Q2 2024 was $1,244,638 compared to $1,095,663 for the three months ended June 30, 2023, primarily related to interest and deferred financing fees associated with the Credit Facility (defined herein), which was drawn in February of 2023. The higher expense in the most recent quarter reflects the higher relative interest rate environment.

The Company recognized a loss on the revaluation of investments of $114,851 as of June 30, 2024, relating to its position in Maritime Resources Corp (acquired through the sale of the Point Rousse Project in 2023).

Other expense was $56,083 in Q2 2024, compared to other income of $209,608 in the comparative period of 2023. The movement primarily reflects the depreciation of the Canadian dollar against the US dollar, resulting in a foreign exchange loss of $252,734 in Q2 2024, compared to a foreign exchange gain of $48,719 relating to the valuation of the Credit Facility (which is denominated in US dollar) and the revaluation of US denominated cash balances. This was partially offset by the increase in interest income.

Net comprehensive loss for Q2 2024 was $23,016,546, or $0.09 per share, compared to $4,571,098, or $0.02 per share, for the corresponding period of 2023. The increase in net loss was primarily related to the impairment of exploration and evaluation assets and an increase in finance expense relating to the Credit Facility, partially offset by lower corporate administration costs and a deferred income tax recovery of $4,869,000 related to the impairment.

Financial Position and Cash Flow Analysis

As of June 30, 2024, the Company had a working capital deficit of $20,340,231, which includes a cash balance of $6,626,925 and reflects the classification of the Credit Facility to current liabilities, which matures in February 2025. As part of the evaluation of potential strategic alternatives being undertaken to advance the Goldboro Project, which remains ongoing, the Company is also actively considering its options with respect to the existing Credit Facility with Nebari.

(In $)		June 30, 2024
Cash and cash equivalents			6,626,925
Other current assets			246,617
Current assets			6,873,542
Trade and other payables			1,030,978
Current portion of loans and other current liabilities			26,182,795
Current liabilities			27,213,773
Working capital deficit*			(20,340,231	)

*Refer to Non-IFRS Measures section below.

The Company's cash flow used in operating activities from continuing operations was $762,316 and $1,435,813 during the three and six months ended June 30, 2024, respectively, relating predominantly to corporate administration costs, partially offset by interest income.

For the three and six months ended June 30,2024, the Company invested $579,442 and $1,610,441, respectively, relating mainly to ongoing exploration programs at the Goldboro Project, including the western extension of the Goldboro Deposit and regional programs, and the continued advancement of project permits.

The Company's cash flow used in financing activities for the three and six months ended June 30, 2024, were $90,835 and $178,493, respectively, reflecting lease payments for corporate office space and the repayment of an insurance premium loan.

Non-IFRS Measures

Signal Gold has included in this press release certain non-IFRS performance measures as detailed below. In the gold mining industry, these are common performance measures but may not be comparable to similar measures presented by other issuers. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company's performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Working Capital - Working capital is a common measure of near-term liquidity and is calculated by deducting current liabilities from current assets.

ABOUT SIGNAL GOLD

Signal Gold is advancing the Goldboro Gold Project in Nova Scotia, a significant growth project subject to a positive Feasibility Study which demonstrates an approximately 11-year open pit life of mine with average gold production of 100,000 ounces per annum and an average diluted grade of 2.26 grams per tonne gold. (Please see the ‘NI 43-101 Technical Report and Feasibility Study for the Goldboro Gold Project, Eastern Goldfields District, Nova Scotia' on January 11, 2022, for further details). On August 3, 2022, the Goldboro Project received its environmental assessment approval from the Nova Scotia Minister of Environment and Climate Change, a significant regulatory milestone, and the Company has now submitted all key permits including the Industrial Approval, Fisheries Act Authorization and Schedule 2 Amendment, and the Mining and Crown Land Leases. The Goldboro Project has significant potential for further Mineral Resource expansion, particularly towards the west along strike and at depth, and the Company has consolidated 27,200 hectares (~272 km ² ) of prospective exploration land in the Goldboro Gold District.

This news release has been reviewed and approved by Kevin Bullock, P. Eng., President and CEO with Signal Gold Inc., a "Qualified Person", under National Instrument 43-101 Standard for Disclosure for Mineral Projects.

FORWARD-LOOKING STATEMENTS

This news release contains "forward-looking information" and "forward-looking statements" about Signal Gold Inc. under Canadian securities legislation. Except for statements of historical fact relating to the Company, forward-looking information is characterized by words such as "plan", "expect", "budget", "target", "schedule", "estimate", "forecast", "project", "intend", "believe", "anticipate" and other similar words or statements that certain events or conditions "may", "could", "would", "might", or "will" occur or be achieved. Forward-looking information includes, but is not limited to, information with respect to: the Company's ability to raise additional funds; the future price of minerals, particularly gold; the estimation of Mineral Reserves and Mineral Resources; conclusions of economic evaluations; the realization of Mineral Reserve estimates; the timing and amount of estimated future production; the estimated future costs of production; estimated capital expenditures; success of exploration activities; mining or processing issues; currency exchange rates; government regulation of mining operations; and environmental and climate change risks. Estimates regarding the anticipated timing, amount and cost of exploration and development activities are based on assumptions underlying Mineral Reserve and Mineral Resource estimates and the realization of such estimates. The estimate of Mineral Reserves and Mineral Resources and capital and operating costs are based on extensive research of the Company and its third-party consultants. Recent estimates of construction and mining costs, and other factors. Forward-looking information is based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made and are inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include: the fluctuating price of mineral commodities; the requirement for additional funding for development and exploration; volatility in the market price of the Company's securities; success of exploration, development and permitting activities; the ability of the Company to obtain required licences and permits; risks relating to government regulation and taxation; the Company's relationships with stakeholders; risks relating to title and Indigenous consultation; health, safety and environmental risks and hazards; reclamation estimates and obligations; capital and operating cost estimates; currency exchange rates; uncertainty in the estimation of Mineral Reserves and Mineral Resources; the potential of production and cost overruns; risks relating to climate change; limitations on insurance coverage; the prevalence of competition within the mining industry; risks related to the dilution of the Company's securities; risks relating to potential litigation; obligations as a public company; risks related to potential title disputes; risks related to obtaining surface rights; potential conflicts of interests; and cyber-security risks.

FOR ADDITIONAL INFORMATION CONTACT:

Signal Gold Inc. Kevin Bullock President and CEO (647) 388-1842 kbullock@signalgold.com

Reseau ProMarket Inc. Dany Cenac Robert Investor Relations (514) 722-2276 x456 Dany.Cenac-Robert@ReseauProMarket.com

SOURCE: Signal Gold Inc.

View the original press release on accesswire.com

FAQ

What was Signal Gold's (SGNLF) net loss for Q2 2024?

Signal Gold reported a net loss of $23,016,546 for Q2 2024, primarily due to a $25,000,000 impairment charge on exploration and evaluation assets.

How much did Signal Gold (SGNLF) invest in the Goldboro Project during Q2 2024?

Signal Gold invested $644,292 in the Goldboro Project during Q2 2024, focusing on advancing project permits, exploration drilling, and regional exploration.

What was Signal Gold's (SGNLF) cash balance as of June 30, 2024?

Signal Gold reported a cash balance of $6,626,925 as of June 30, 2024.

Did Signal Gold (SGNLF) receive any significant permits for the Goldboro Project in 2024?

Yes, Signal Gold was granted a 20-year Mineral Lease for the Goldboro Project in July 2024 from the Government of Nova Scotia.

What was the outcome of Signal Gold's (SGNLF) recent drill program at Goldboro?

Signal Gold completed a 5,179-metre drill program on the western extension of the Goldboro Deposit, with initial results indicating multiple high-grade zones of gold mineralization and 41 occurrences of visible gold.