In a December 19, 2024 research note, Red Cloud Securities analyst Ron Stewart maintained a Buy (Speculative) rating on NexGold Mining Corp. (NEXG.V:TSXV; NXGCF:OTCQX; TRC1.F:FRA) with a CA$2.50 target price, following the company's merger completion with Signal Gold which brought in the 3.1-million-ounce Goldboro gold deposit.
The Goldboro property, located on the eastern shore of Nova Scotia, has seen historic mining activity since 1862. According to the report, "Mining in 1893-1910 is estimated to have recovered 54.9k oz [gold] Au at an av. grade of 4.11 [grams per tonne] g/t Au." Signal Gold acquired the project in 2017, conducting extensive exploration including "56km of expansion and infill drilling in 2017-2021 as well as an underground bulk sample in 2018."
The project currently hosts significant resources, with open pit Measured and Indicated resources of "15.7Mt grading 2.822 g/t Au for 1.4M oz Au" and underground resources of "5.9Mt grading 6.085 g/t Au for 1.2M oz Au." These form the basis for Probable reserves of 15.8Mt grading 2.26 g/t Au containing 1.2 million ounces.
The Feasibility Study demonstrates robust economics with a post-tax NPV5% of CA$328 million and IRR of 25.5% at US$1,600/oz gold. Stewart noted that "the post-tax NPV5% and IRR increase to CA$556M and 37.5%, respectively, at US$2,400/oz Au." The study outlines initial capex of CA$271 million and AISC of US$849/oz.
The analyst sees significant upside potential, noting that "Infill drilling has the potential to reduce the strip ratio by upgrading and incorporating Inferred resources, expanding the optimized pit design." Furthermore, "With ~1.5M oz Au already in underground M&I+I resources, further exploration at depth could demonstrate the potential to develop an underground operation and significantly increase the mine life."
Major shareholders include management and insiders at 9.2%, Sprott Inc. at 6.9%, and First Mining Gold Corp. at 2.72%.
The share price at the time of the report of CA$0.69 represents a potential return of 262% to Red Cloud's CA$2.50 target price.
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Important Disclosures:
- NexGold Mining Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of NexGold Mining Corp.
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Disclosures for Red Cloud Securities, NexGold Mining Corp., December 19, 2024
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Company Specific Disclosure Details
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