Slate Grocery REIT T.SGR

Primary Symbol: T.SGR.UN Alternate Symbol(s): SRRTF

Slate Grocery REIT (the REIT) is a Canada-based open-ended mutual fund trust. The REIT focuses on acquiring, owning, and leasing a portfolio of grocery-anchored real estate properties. The REIT has a portfolio that spans 15.2 million square feet of GLA and consists of 116 critical real estate properties located in the United States of America. The REIT owns and operates real estate infrastructure across United States metro markets. The Company's properties include Centerplace of Greeley, River Run, Sheridan Square, Flamingo Falls, Northlake Commons, Countryside Shoppes, Creekwood Crossing, Skyview Plaza, Riverstone Plaza, Fayetteville Pavilion, Clayton Corners, Apple Blossom Corners, Hillard Rome Commons and Riverdale Shops, Hocking Valley Mall, North Lake Commons, Eastpointe Shopping Center, Flower Mound Crossing, North Augusta Plaza, among others. The REIT's investment manager is Slate Asset Management (Canada) L.P.

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Slate Grocery REIT

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Post by mbgldon Feb 18, 2009 1:21pm

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National BankFinancial Initiates Coverage

HIGHLIGHTS

Revitalizing a past producer. San Gold hopes to bring the past producing Rice Lake Mine (1.4
mln ozs) into commercial production in 2009. The mine, together with the nearby Cartwright
and San gold #1 deposits has a resource base of 1.6 mln ozs, and a 1,250-tpd (tons/day) mill
facility that can be expanded to 1,800 tpd at a low capital cost. Current ore is sourced from the
D-Shaft area, and a ramp from surface is underway to exploit the recently discovered high-
grade Hinge Zone, located approximately 1.3 kms east of the Rice Lake mill. Production for
2009 is estimated at 63,000 ozs at a cash cost of US$570/oz. Production ramps up to 100,000
ozs at US$430/oz in 2010, and hits 190,000 ozs at US$360/oz by 2012. The increase in production
largely relates to mining higher grades from the Hinge Zone.
High-grade Hinge targets could be the future. Drilling in 2008 encountered high-grade gold
mineralization (i.e. 2.49 opt [oz/ton] over 20.7 feet) in a new target known as the Hinge Zone. A
decline is currently advancing on this zone to bring it into production. We have assumed that
the Hinge Zone will contain a 1.0 mln ozs resource at a grade of 0.66 opt. An initial resource for
the Hinge Zone is expected by the end of Q1 2009. There are at least six other potential Hinge
Zone targets on the property. Should the Hinge Zone and adjacent target areas prove to be
significant sources of high-grade ore, we believe that San Gold will become a prime candidate
for consolidation.
NAV based valuation. Our NAV for San Gold is $2.02 per share. Junior producers have historically
traded at 0.40 to 1.86x NAV (averaging 1.1). Given the increased momentum in the gold space,
we believe that San Gold deserves a 1.1x multiple to NAV. On this basis, our target price is
$2.20. The new high-grade discovery at the Hinge Zone should provide the operations with a
new supply of high margin ounces. These ounces should dramatically improve the profitability
of the Rice Lake Mine. As such the shares are rated Outperform.