Investors eye Goldboro as one of Canada’s largest near-production gold mines
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A renewed focus on domestic resource development have underscored the importance of developing Canadian assetsYou can save this article by registering for free here. Or sign-in if you have an account.One of Canada’s largest near-production gold projects could finally begin construction this year after years of delays.Subscribe now to read the latest news in your city and across Canada.Subscribe now to read the latest news in your city and across Canada.Create an account or sign in to continue with your reading experience.Create an account or sign in to continue with your reading experience.NexGold Mining Corp. chief executive Kevin Bullock said the Goldboro mine in Nova Scotia is now ready to move forward.“All federal and provincial permits are in place and we have a First Nations agreement signed,” he said. “The only remaining steps are finalizing financing and a board investment decision.”Construction is expected to begin in the fourth quarter, with the biggest challenge being workforce availability. Bullock said roughly 400 workers are needed to build the mine.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.“The biggest risk is construction itself and securing skilled labour given a growing mining sector,” he said. “But we’re well located, accessible and confident we’ll attract the workforce we need.”Bullock said Goldboro is “completely ready to go” since typical junior-mining risks such as permitting delays or Indigenous opposition have already been resolved.NexGold completed a feasibility study in 2022, secured provincial and federal environmental approvals, signed a Mi’kmaq benefits agreement and raised significant financing in 2024 and 2025, putting the project on track for a final investment decision.Until late 2024, the Goldboro project faced significant risks due to uncertainty around financing, regulatory approvals, gold prices and rising construction costs. Analysts and investors saw progress as dependent on securing funding and permits, with delays or cancellation still a realistic possibility.The feasibility study, however, concluded Goldboro could operate as an 11-year open-pit mine that annually produces roughly 100,000 ounces of gold, with an average grade of about 2.26 grams per tonne, and total recovered gold of approximately 1.1 million ounces.The study was based on a gold price of about US$1,600 per ounce and estimated capital costs of roughly $271 million. NexGold is now updating it to reflect both cost inflation and today’s much higher gold prices of more than US$4,000 per ounce.“The updated study will give us more accurate numbers and allow us to negotiate better financing terms,” Bullock said.Higher prices will more than offset increased construction and operating costs, he said, and Goldboro could generate roughly $250 million in annual cash flow, potentially matching the company’s current market capitalization of more than $400 million in less than two years. The company raised $112 million last fall in a flow-through share private placement.Its predecessor company, Treasury Metals Ltd., traded more than 10 times higher in its heyday than NexGold does today. That company merged with Blackwolf Copper and Gold Ltd. and Signal Gold Inc. in 2024, changed its name and underwent a reverse stock split. NexGold was trading at around $1.75 mid-Friday, up 145 per cent over the past 12 months.Beyond pricing, Bullock said gold remains strategically important for Canada since it’s “critical as a hedge against inflation and to support financial markets.”Recent geopolitical tensions and a renewed focus on domestic resource development have underscored the importance of developing Canadian assets, he said. NexGold plans to make a final investment decision on Goldboro by mid-year.Ron Stewart, an analyst at Red Cloud Securities Inc., is optimistic about Goldboro.“It’s pretty likely given the strength in the gold market and the progress they’ve made at the project,” he said. “They’re pretty much on track to move forward through to construction. They’ve got the approvals, including environmental clearances, so I’m optimistic they’re in good shape.”Stewart said the robust gold market has “completely changed the paradigm” for mine development and Goldboro is well suited to NexGold’s strategy.“It’s probably too small for majors like Agnico Eagle or Barrick, but it’s the right size for a company like NexGold,” he said, pointing to the deposit’s relatively high grade and ongoing resource expansion.But Stewart said companies such as NexGold are not banking on gold staying as high as it is right now.“Many developers are still conservative, using prices around US$2,500 to US$2,800 an ounce,” he said. “If gold averages US$3,000 or higher, the upside is significant. A US$1,000 increase per ounce could translate into roughly US$60 million in after-tax benefit.”Stewart put Goldboro in the “middle of the pack” among Canadian mines, but it is important to NexGold’s growth.“It’s a modest mine, but they’re a new player,” he said. “They’re aiming to grow into a mid-tier producer over the next five years and they’re doing it in a disciplined way.”Stewart said construction remains the primary risk.“Cost overruns and delays can happen, but Goldboro is a relatively straightforward project and the company has raised about $110 million and is checking the boxes to de-risk it,” he said.Bullock said he sees no reason the project won’t proceed.“There’s nothing standing in the way,” he said.• Email: arankin@postmedia.comPostmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. 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