Gold assay results reaffirms Signature’s ‘serious potential’ to make a run at new highs
Signature Resources Ltd. (TSXV:SGU | OTCQB:SGGTF) (“Signature”) has recently posted positive exploration results from its Ontario brownfield project and commissioned further exploration via airborne survey with the company goal of expanding the resource. This year’s results have successfully reaffirmed historic gold assays and should expedite a resource estimate.
Lingman Lake is 80 km south of Yamana’s Monument Bay project, 218 km northwest of Goldcorp’s Musselwhite mine, 314 km north of Red Lake, Ontario and an all-weather road is slated for nearby construction between 2022-2024. The deposit is comprised of recently consolidated lands with a historical estimate of 234,648 oz Au with an average grade of 6.86 g/t, making it a clear choice for brownfield development.
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From 2006 to 2015, the share of budgets devoted to near-mine exploration rose from 44% to 54%, while investment in greenfield programmes just about halved from 40% to 22%. In 2015, the brown / green funding differential jumped from $36-million in 2006 to $470-million in 2015. This increased focus on existing mine work is thanks to the big dogs spending money developing the area directly around their own sites.
Exploration targets remain open at Lingman, but bulk and composite samples have demonstrated higher grade potential, and a deep vertical drill hole at 240 metres returned 1.5 metres of 325 g/t gold. The cost of replacing the existing infrastructure (shaft, underground workings and historic drilling) compares well with the company’s current market capitalisation. Approximately ~$60 million in replacement value versus the current market cap of ~$8 million, an indication that there is still good value in the company’s share price.
The strong correlation from the sampling program further supports the company’s thesis that this is a high grade, under drilled property with a multiple vein layered system which suggests the potential for low cost resource expansion. All of the historic assays, including those that were not re-sampled, for a total of 25,000 meters will be meshed with future core assays when working towards a defined resource, allowing Signature to direct future drill programs on expansion drilling versus twinning, resulting in significant savings.
The 2017 results, according to the Qualified Person Report, represent an excellent correlation between the historic and 2016 Au assays. In 2016, around 20,000 metres of core was archived at site, with 3,457 metres re-logged and sampled. 22-holes representative of the deposit along a 1,000 metre strike length and 230 metres width were chosen. 1,331 samples were collected and assayed for gold and 52 multi-elements. 450 samples were core duplicates producing 94% correlation with historical drill results, and 17% of the core duplicates yielded results at or above 5 g/t.
A historic bulk sample program also assayed an average of 19.0 g/t, so this asset does have the potential to be fully developed. Thankfully, Signature’s team are well-equipped in terms of experience and are certainly up for the task. Led by Mr. Walter Hanych, who has held such positions as chief geologist and project manager on projects ranging from grassroots to advanced mine exploration and resource development/feasibility. Mr Hanych is well-supported by three directors and a three-specialist advisory board.
As of January 30, the company had a market cap of $5.651m and net shares of 80,721,524. 19% is owned by management and insiders. Signature stock is currently trading at the lower end of its current trend at CAD$0.07, but has serious potential to make a run at new highs later this year.