SABINA GOLD&SILVER COM NPV (OTCMKTS:SGSVF) is a micro-cap precious metals miner that just broke out of its recent range. There are likely a few catalysts driving the move. The first that comes to mind is recent strength in gold, given a boost by the Trump administration’s decision to fire Tomahawk missiles into Syria late last week. In addition, the company just announced full-year 2016 financial results.
The headline is this: For the three-month period ended December 31, 2016, the Company reported a net loss of $2.0 million, favorable by $2.7 million compared to the same period of 2015. The difference quarter-over-quarter was largely the result lower stock-based payments and write-downs of mineral properties. In Q4 2016, the Company recorded a write-down of $1.9 million on its the Wishbone mineral properties. In Q4 2015, the Company recorded a write-down of $4.0 million on certain non-core Wishbone mineral claims.
SABINA GOLD&SILVER COM NPV (OTCMKTS:SGSVF) is a well-financed, emerging precious metals company with district scale, world class undeveloped assets in one of the world’s newest, politically stable mining jurisdictions: Nunavut, Canada.
In September 2015, Sabina released a Feasibility Study on its 100% owned Back River Gold Project which presents a project that has been designed on a fit-for-purpose basis, with the potential to produce ~200,000 ounces a year for ~11 years with a rapid payback of 2.9 years. At a US$1,150 gold price and a 0.80 exchange rate, the Study delivers a potential after-tax internal rate of return of approximately 24.2% with an initial CAPEX of $415 million.
In addition to Back River, Sabina also owns a significant silver royalty on Glencore’s Hackett River Project. The silver royalty on Hackett River’s silver production is comprised of 22.5% of the first 190 million ounces produced and 12.5% of all silver produced thereafter.
According to the company’s recent 2016 summary, “The Company had approximately C$39.9 million at December 31, 2016, and has budgeted $8.5 million as its base budget for 2017. The base budget delivers the completion of the environmental assessment process; advancement of Inuit Impact and Benefits Agreement and land tenure negotiations with the KIA; completion of basic engineering and project execution plan; and, completion of a mapping, rock and till sampling and geophysical exploration field program. In addition, the Company has planned certain discretionary activities, including an exploration drilling program, completion of the water license review process and commencement of detailed engineering and project financing. Depending on the timing and success of the permitting process, total expenditures could range up to approximately $31 million in 2017.”
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“Much was accomplished in 2016,” said Bruce McLeod, the Company’s President& CEO. “Although we received a set-back from the Nunavut Impact Review Board (“NIRB”), we understand and support the NIRB’s desire for a high level of confidence in our proposals for the Back River Project (“Project”). We are happy to be back in the process and believe that our recently submitted Final Environmental Impact Statement Addendum (“FEIS Addendum”) presents additional mitigation, information and plans that will address NIRB’s concerns. In 2016, we also continued optimization and trade-off studies which we believe could positively impact the Project economics. On the exploration front, a new discovery at Convergence and the successes at our Hivogani and Kogoyok targets continued to demonstrate the opportunities for new discoveries and extended mine life at Back River. Other geological programs completed during the year enabled us to plan a high impact drilling campaign for 2017 with our recently raised flow-through financing. 2017 has started out positively and we look forward to continued support for the Back River Project from all stakeholders as we work through the process.”
The chart shows 33% tacked on to share pricing for the name in the past month. This is emblematic of the stock. SGSVF has evidenced sudden upward volatility on many prior occasions. Furthermore, the company has seen interest climb, with an increase in recent trading volume of approaching 110% beyond its prior sustained average level.
Currently trading at a market capitalization of $284.4M, SGSVF has a significant war chest ($8.2M) of cash on the books, which stands against about $1.2M in total current liabilities. The company is pre-revenue at this point. As more color becomes clear on the name, we will review the situation and update our take. For continuing coverage on shares of $SGSVF stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!