SABINA GOLD&SILVER COM NPV (OTCMKTS:SGSVF) is a penny stock that has grabbed hold of the attention of traders during the stock’s recent bounce. SGSVF has been red hot so far in 2017, ramping higher from around $0.60/share to nearly $2/share just this year. The company recently reported its quarter ended June 30, 2017, which offers some clear insight into where this story may be headed from here.
“Much was accomplished during the second quarter as we continued to advance the Back River Project through basic engineering, optimization studies and our environmental assessment efforts. We are pleased that our final public hearings in Cambridge Bay in late May resulted in a positive recommendation for the Project from the Nunavut Impact Review Board on July 18 th. This is a milestone de-risking event for the Company and the Project. We are now awaiting a decision from the Minister of Indigenous and Northern Affairs Canada,” said Bruce McLeod, President & CEO. “In addition, the exploration success we had at the Goose Project this spring has provided opportunities to extend the mine life of the project. In particular, grades at the Vault Zone are more than double the average grade of the Back River resource and could offer opportunities to positively impact Project economics. We have commenced our summer drilling campaign with a focus on the Vault Zone and look forward to the results.”
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, SGSVF 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, SGSVF 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.
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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.”
As noted above, SGSVF just hit the market with its latest financial data. This has been a strong player in the Canadian gold junior miner space. The company is pre-revenue and still a future prospect, so financial data can only go so far in telling us a story, but it does give some insight into how the outfit is being managed.
For the three months ended June 30, 2017, SGSVF reported a net loss of $0.6 million or $0.00 per share, in comparison to a net income of $0.2 million or $0.00 per share in the corresponding period of 2016. The difference quarter over quarter was primarily the result of lower sales of Pure Gold Mining Inc. (“Pure Gold”) shares in 2017 compared to 2016.
For the six months ended June 30, 2017, the Company reported a net loss of $2.0 million, unfavorable by $1.6 million compared to the same period of 2016. The increase in loss period over period was mainly due to a timing difference in the granting of stock options and a higher net gain realized on the sale of Pure Gold shares in the six-month period ended June 30, 2016.
The chart shows -9% shaved off of share values during the past week in the stock. However, the situation may be worth watching. SGSVF is a stock whose past is littered with sudden rips. In addition, the stock has witnessed a pop in interest, as transaction volume levels have recently pushed topping 140% beyond what we have been seeing over the larger time frame.
Currently trading at a market capitalization of $363.6M, SGSVF has a significant war chest ($16.1M) of cash on the books, which is balanced by virtually no total current liabilities. The company is pre-revenue at this point. You can bet we will update this one again as new information comes into view. 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 breakout pick!
Disclosure: We hold no position in $SGSVF, either long or short, and we have not been compensated for this article.