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XMFSinchiruna (27.14)

The Best-Kept Secret in Gold

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June 11, 2012 – Comments (12)

The best-kept secret in gold isn't even ratable in CAPS, which speaks to why it may be flying under the radar.

If you don't know the company well, I recommend putting in he time to understand it well, and I think the odds are good you'll come away from the research with a firmly bullish outlook.

The company is Sabina Gold & Silver, or SGSVF on the OTC. I've owned it since 2006, and already cashed out of a nice multi-bagger last year with the stock above $6. I kept a small portion, began accumulting again beneath $4, and accelerated my buying below $3. From current levels, and considering the valuation elements laid out in the following article, the investment thesis at these prices is not hard to grasp.

Good luck, and please tell me what you think.

http://www.fool.com/investing/general/2012/06/11/the-best-kept-secret-in-gold.aspx

12 Comments – Post Your Own

#1) On June 11, 2012 at 10:34 PM, skypilot2005 (< 20) wrote:

http://www.sabinagoldsilver.com/s/NewsReleases.asp?ReportID=528845

June 04, 2012

Sabina Announces More Positive Drill Results from 2012 Drilling at the Back River Gold Project, Nunavut

Hole 12GSE182 at Llama returns 21.76 g/t Au over 11.70 m including 51.52 g/t Au over 4.50 m;
Hole 12GSE173 at Umwelt extends deposit by 200 m and returns 9.50 g/t Au over 7.15 m;

http://www.sabinagoldsilver.com/s/NewsReleases.asp?ReportID=527518

 

May 29, 2012
SABINA GOLD & SILVER ANNOUNCES POSITIVE PRELIMINARY ECONOMIC ASSESSMENT AT BACK RIVER GOLD PROJECT, NUNAVUT

AVG. PRODUCTION OF ~300,000 OZ/YR

BASE CASE PRE-TAX IRR OF 32% AND NPV OF $1.1 BILLION (5% discount)

Excerpts:

The Project generates life-of-mine ("LOM") after-tax net cash flow of $1.1 billion on gross revenues of $4.6 billion with a payback period of 3.0 years;

 

Total cash costs of $542/oz LOM including royalties, refining and transport;

 

Base case commodity assumptions of $1,250/oz gold and $1.20/litre diesel.

"The results of the PEA demonstrate how valuable good grade is to a project, particularly in remote locations. We believe Back River is a world-class gold project. The high-grade and continuity of the deposits provide us with the flexibility to design and build a mid-tier gold mine with attractive operating costs for a modest up-front capital commitment. We have several financing options to contemplate as we advance the Project, including the possible monetization of part or all of the significant silver royalty we hold on Xstrata Zinc Canada's Hackett River project," said Rob Pease, President & CEO. 

He added: "Results from this year's ongoing exploration and infill drilling program should have a positive impact on the Project going forward. For example, based on our initial results at Llama, we anticipate there could be an upgrade and increase in the open-pit resources there. All of our deposits remain open to depth and we look forward to continued exploration success which will grow Back River as we embark upon a PFS and enter the permitting process."

The study does not incorporate any results of the Company's ongoing 2012 exploration program."

 Muchas gracias!

Sky

Multilingual Web Link Assistant to Sinchi

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#2) On June 12, 2012 at 2:39 PM, SN3165 (< 20) wrote:

What's up with Alexandria? We're looking at 5 cents soon... :-(

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#3) On June 13, 2012 at 8:09 AM, XMFSinchiruna (27.14) wrote:

SN... I wish I knew! If I ever thought it would be possible for the market to value 1.4 million ounces of gold at $8.4 million, I would not have been so aggressive with my stake. The forthcoming recovery of the sector at large will ease this strain, but I share your disappointment over the present depth of the weakness.

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#4) On June 13, 2012 at 11:16 AM, hdotmom (< 20) wrote:

Do you think it is time to buy more?  And what do you think about Scorpio?  These are my worse.  I am down on others but not to this extent.  This is an exciting time!

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#5) On June 13, 2012 at 11:57 AM, XMFSinchiruna (27.14) wrote:

Hi hdotmom! Always a pleasure to see you here. :) I added a bit of Scorpio this week under $0.80.

Even though I retain substantial confidence that Alexandria will recover from these lows, I would seek to steer Fools away from increasing their exposure here. The degree of weakness here does impair the company's risk profile. There are safer ways to double one's money.

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#6) On June 13, 2012 at 12:11 PM, SN3165 (< 20) wrote:

I, of course, refuse to sell at .5 cents. I've been buying SLW '13 warrants and options as you saw in the video but also trying to add to my positions in Kimber and Metanor and created a new position in Magellan Minerals.

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#7) On June 13, 2012 at 12:18 PM, SN3165 (< 20) wrote:

Silver has formed an inverseHead and Shoulders Pattern - http://www.youtube.com/watch?v=7iZvQEhQsGE&feature=plcp

 He's been right on this before on silver's last big run up. If this is right again, we could be looking at some pretty big gains. 

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#8) On June 13, 2012 at 3:39 PM, hdotmom (< 20) wrote:

Thanks for the response.  I am never far away.  I do get busy but always catch up.  Thanks again for all you do!

Rose 

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#9) On June 14, 2012 at 10:23 PM, skypilot2005 (< 20) wrote:

On June 13, 2012 at 8:09 AM, TMFSinchiruna (79.74) wrote:

 

"SN... I wish I knew! If I ever thought it would be possible for the market to value 1.4 million ounces of gold at $8.4 million,"

Plus, some possible additional ounces: 

http://www.azx.ca/

http://www.azx.ca/news/2012/news20120524.html

 

Alexandria Drills 12.48 g/t Gold over 8.20 m at Akasaba, Deepening High Grade Zone 100 m Below Current Resource

Toronto, Ontario, May 24, 2012 

Eric Owens, President and CEO of the Company, said, "The results at Akasaba continue to get even better. Within the context of our geological model, vein merging offers the potential that more ounces exceeding our underground resource grade may be found. Akasaba remains our drilling priority and I emphasize that the deposit remains open at depth and along strike."

Respectfully, 

Sky 

Official Web Link Assistant to Sinchi 

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#10) On June 15, 2012 at 9:56 PM, skypilot2005 (< 20) wrote:

On June 13, 2012 at 8:09 AM, TMFSinchiruna (74.61) wrote:

 

:SN... I wish I knew! If I ever thought it would be possible for the market to value 1.4 million ounces of gold at $8.4 million"

Here's another "mispriced" miner. I. M. O.: 

http://www.primeromining.com/Operations/Reserves-and-Resources/default.aspx

 5/15/12

 

Reserves and Resources

 San dimas mine as at december 31, 2011

Sky 

 

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#11) On June 16, 2012 at 7:15 AM, skypilot2005 (< 20) wrote:

http://www.theaureport.com/pub/na/13621

Euro Debt Crisis is Good for Gold and Silver: Sprott Money Manager Charles Oliver

6/13/12

Sky 

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#12) On June 16, 2012 at 7:32 AM, skypilot2005 (< 20) wrote:

http://www.theaureport.com/pub/na/13621

TGR: What advice would you give someone who is just now starting to invest in this sector?

CO: What a great time to get in because it's a half-price sale. I look at what's going on around the world. It feels very much like 2008 when it looked as if the world was about to end, especially in Europe. Equities and the gold price were under pressure, which was kind of ironic because the U.S. embarked upon a major printing program then that was very bullish for gold. Now, it looks as if Europe is about to embark on a major printing program that should be very bullish for gold. So it's a great time to buy. You have to be patient. These markets will not stay like this forever. When they turn, they can turn fast.

For those who have been invested in this market: The fundamentals look very good. Be patient. Don't lose faith. This story for higher gold prices and higher silver prices is still very much intact and looks very positive. Just be patient.”

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