Signal Gold Inc T.SGNL

Inflation and associated increase in costs to mine gold

[grapesofwrath]

I seldom see anyone on this board talk about the fact that one of the major reasons why these junior miners have fallen out of favor (as well as the entire mining sector) despite gold being at historic highs is that the cost to mine the gold has dramatically risen.  You can no longer value this mine or any other mine based upon old studies. 

I really don't think the cost of mining will go down much at all once inflaton slows.  Eventually, the rate of inflation will just slow but we won't get deflation unless we hit a serious recession.

[Tradernick]

Everything has gone up - not just operational + capital costs for a mine-to-be-developed.  Re: NPV, simply increase the discount rate in the analysis to 8% (from 5%) and add 20% to the AISC.  The US spot price of gold is heading to $2500 USD in the short-term (whereas all the analysis is quoted in $1600 USD).  No biggie....the math , and valuation, remains incredibly compelling.

[Lothar]

The original Atlantic Gold already demonstrated proof of concept for an open pit mine in Nova Scotia. If they could profitably operate Touquoy from 2017-2019 (gold price has outpaced inflation since then) then Goldboro is definitely viable now.  The only reason Touquoy isn't still in production is gross mismanagement by St. Barbara, plain and simple. It would be nice to see the Artemis