RE: to yo yo and the boardBJ,
I appreciate the discussion, but to me it is difficult to understand what you are saying, both grammatically and operationally.
I think you are saying that the company should either go into production or sell the mines, and in the absence of either of these occurrences the stock will not go higher.
Are you kidding me? You're saying that just as the bull market in silver starts they should sell it all? Not to say that they cannot sell one or more mines in China for cash (I know they have considered this because there is interest out there), but the company currently has cash in the bank so they are not starved for cash. If money was not available at all, they would certainly sell some of the properties, but that is not the case. So why on earth would you sell, or for that matter rush to production when the price of silver is just starting to take off and mining economics still stink.
And as for your comment that you must cash in to keep a stock up, than tell me why the stocks of SSRI or ARU.T don't go down. Yes, I know they have great discoveries, but neither of them have plans to either sell the properties or go into production, the former because they are waiting until silver really takes off and the latter because they are still delineating the discovery, a process that could take years.
Aside from scope (although keep in mind that Erbaohuo has 300+ million 122b ounces, many of which will be converted to 43-101), they have the same operating philosophy as any PM mining company should have in the early stages of the bull market. In fact, the only miners that are actively selling and mining properties today (aside from majors like NEM and GG) are BASE METAL miners, as metals prices have risen so much that production profits are huge and global capital markets are practically throwing themselves at base metal miners(OF COURSE, BASE METAL PRICES ARE UP SO MUCH BECAUSE, UNLIKE GOLD AND SILVER, THEY ARE NOT MANIPULATED). Silver still is priced too low to draw in big money for acquisitions of smaller mines, and production economics for the most part stink.
No, SDRG doesn't have $12 million in the bank, but name me one junior in the market that does. Heck, a lot of mid-tier names don't have that. Keep in mind that SDRG does not need $12 million to stay in business, actually just a couple hundred thousand per month (I think they have close to $1 million now in the bank). But with $12 million they could dramatically expand the pace of exploration, development, and acquisition.
However, the market has been so bad for this sector this year that nearly all companies have just enough to get by, and last I heard having 38 million ounces of resources was enough to keep a stock from tanking. Rule of thumb is 10% of market value, so 38 mil x $14/oz = $532 mil x 10% = $53 million. $53 mil / 67 mil shares = $0.79, so based on that rule the stock should at least reach that level once people stop worrying about financing.
As for the company's game plan of buying silver properties low and exploiting them, I think SDRG gets an A+. In just two years they have had huge success at Cerro los Minitas, taking it from 0 ounces 43-101 to 30-35 million now, plus they just made a huge new discovery in June that should make it clear that a new report now would probably put this number over 50 million ozs., IMO.
In China, they already 43-101'd the smallest of the nine properties (6 million Ag ounces), and started on number two. Plus, drilling so far has been very successful at Laopondao, which should yield a very large 43-101 resource number when it is completed next year.
Another issue juniors have had to deal with is the glacial pace that assay results and 43-101 reports take due to the glaring labor shortage in that area. They were promised the Mexico report in November but it came out in February, and the China report in May but it came out in July. Very, very difficult to raise money when you are always waiting, especially in a deteriorating capital market, plus a TSX IPO was not allowed without the two 43-101 reports. So while they were waiting for them, the market tanked, and then the E came and compounded the situation.
As for excuses about the E, I agree that it shouldn't have happened. However, it was simply a growing pain as the company moved into China, not a long-term issue. If they had huge money in the bank, perhaps they could have afforded a Big Six firm, but given the situation, they had to make due (as nearly all juniors do). If the market for juniors was good, the resolution of the E would have brought buying back into the stock, but since it not only is bad but worsening (amazing, isn't it?) somehow it keeps getting rehashed as a reason why the company is in trouble. Crazy.
And as for building the BOD, they could have had one months ago. It doesn't take much effort to just hire someone; geez, 90% of juniors have BOD's that do nothing except collect options and kowtow to the CEO. Marc has been meeting with people that are high profile, with the ability to really transform the company, and will hire them when he has the right people. I know for a fact that these discussions are very advanced, and believe that completion of near-term financing is the only thing standing in the way from these appointments.
In the meantime, he has Colin Sutherland on the Board as his CFO, a guy with huge experience in both exploration and production, as well as the demands of a large public company. Not to mention Manual Chan, a very sharp guy (spent a week with him at PDAC), as well as his head of Mexican ops, Doug Wood, one of the best in the business and a former Newmont guy.
Moreover, with the TSX application process having started already, they clearly are about to make the BOD announcements, but first they'd like to resolve the bridge financing so they can be covered until the application is approved (likely a few months, IMO). And I can guarantee that it won't be done at these price levels.
As for the "$3 IPO", that means nothing to me. There is no rule that says they must do $3, or $2, or anything. The key is just to capitalize the company in a manner most favorable to shareholders, period. Take a look when the stock hit $3; yep, April, right when the junior market tanked and started falling for the year.
Hope I'm not rambling here, but the silence has been deafening in the junior sector at a time when gold and silver are finally starting to break out, with nearly no interest in buying 90%+ of the stocks and even less interest in discussing them. There are so few buyers around that any little thing becomes a negative focal point, such as what should be a routine financing or hiring a BOD. SDRG has multiple options on both fronts, and should be finalizing both soon.
Then we'll see if the stock is worth less than 10% of its resources' market value.
yoyo
p.s. if anyone has some intelligent topics to discuss, feel free to inbox me. all i'm after is dispelling negativity based on flawed logic.