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Source: Ron Stewart 12/23/2024
NexGold Mining Corp. (NEXG.V:TSXV; NXGCF:OTCQX; TRC1.F:FRA) recently announced the merger completion with Signal Gold, which brought in the 3.1-million-ounce Goldboro gold deposit, according to a Red Cloud Securities research note.
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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Disclosures for Red Cloud Securities, NexGold Mining Corp., December 19, 2024
Disclosure Requirement Red Cloud Securities Inc. is registered as an Investment Dealer and is a member of the Canadian Investment Regulatory Organization (CIRO). Red Cloud Securities registration as an Investment Dealer is specific to the provinces of Alberta, British Columbia, Manitoba, Ontario, Quebec, and Saskatchewan. We are registered and authorized to conduct business solely within these jurisdictions. We do not operate in or hold registration in any other regions, territories, or countries outside of these provinces. Red Cloud Securities bears no liability for any consequences arising from the use or misuse of our services, products, or information outside the registered jurisdictions. Part of Red Cloud Securities Inc.’s business is to connect mining companies with suitable investors. Red Cloud Securities Inc., its affiliates and their respective officers, directors, representatives, researchers and members of their families may hold positions in the companies mentioned in this document and may buy and/or sell their securities. Additionally, Red Cloud Securities Inc. may have provided in the past, and may provide in the future, certain advisory or corporate finance services and receive financial and other incentives from issuers as consideration for the provision of such services. Red Cloud Securities Inc. has prepared this document for general information purposes only. This document should not be considered a solicitation to purchase or sell securities or a recommendation to buy or sell securities. The information provided has been derived from sources believed to be accurate but cannot be guaranteed. This document does not take into account the particular investment objectives, financial situations, or needs of individual recipients and other issues (e.g. prohibitions to investments due to law, jurisdiction issues, etc.) which may exist for certain persons. Recipients should rely on their own investigations and take their own professional advice before investment. Red Cloud Securities Inc. will not treat recipients of this document as clients by virtue of having viewed this document. Red Cloud Securities Inc. takes no responsibility for any errors or omissions contained herein, and accepts no legal responsibility for any errors or omissions contained herein, and accepts no legal responsibility from any losses resulting from investment decisions based on the content of this report.
Company Specific Disclosure Details
1. The analyst has visited the head/principal office of the issuer or has viewed its material operations.
2. The issuer paid for or reimbursed the analyst for a portion, or all of the travel expense associated with a visit.
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Recommendation Terminology Red Cloud Securities Inc. recommendation terminology is as follows: • BUY – expected to outperform its peer group • HOLD – expected to perform with its peer group • SELL – expected to underperform its peer group • Tender – clients are advised to tender their shares to a takeover bid • Not Rated or NA – currently restricted from publishing, or we do not yet have a rating • Under Review – our rating and target are under review pending, prior estimates and rating should be disregarded. Companies with BUY, HOLD or SELL recommendations may not have target prices associated with a recommendation. Recommendations without a target price are more speculative in nature and may be followed by “(S)” or “(Speculative)” to reflect the higher degree of risk associated with the company. Additionally, our target prices are set based on a 12-month investment horizon. Dissemination Red Cloud Securities Inc. distributes its research products simultaneously, via email, to its authorized client base. All research is then available on www.redcloudsecurities.com via login and password Analyst Certification Any Red Cloud Securities Inc. research analyst named on this report hereby certifies that the recommendations and/or opinions expressed herein accurately reflect such research analyst’s personal views about the companies and securities that are the subject of this report. In addition, no part of any research analyst’s compensation is, or will be, directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.
( Companies Mentioned: NEXG.V:TSXV; NXGCF:OTCQX; TRC1.F:FRA,
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