Sage Gold Inc SGGDF

SGX trying to be a prospect generator?

[Tibber]

First I will say that I own no Sage shares anymore but I am still watching closely as I think the BG area has huge potential and Sage is the second largest property owner.  That in itself is a reason to own it ... but I will wait to get back in.

There are some exploration companies that never do nothing but build up  a portfolio of properties, increase their value and then either option them off to others for more, sell them off with royalties or sell them outright for cash which is then paid out to shareholders as a special dividend.  Many companies do a very good job of this but most often the share price never reflects the value of the sum of the parts.

Is this the direction Sage is going?  They've added, what, 11 or so properties in the last 6 months?  This would seem to be an excellent recipe for some nice payoffs down the road.

Wait ... the MO of most good prospect generators is positive cashflow and very small float (ie less than 50 million shares O/S)  otherwise any special dividend on the sale of property will cost more to distribute that it would provide value for the shareholder.

I've been trying to figure out for several months what their business plan must be. This was the most logical conclusion  I could come up with given the huge property acquisitiion spree over the past while, but at times I wonder if even they know what their plan is  .... The only point I can think of  that refutes my theory is that all the properties are in the same proximity (BG area) which could (and should) mean there are other motives ...

Nevertheless If becoming a prospect generator is what their plan to do they need a huge cash infusion and fewer shares outstanding .... in fact no matter what their plan is that is what they need.

What does that tell you?

another option I came up with is to sell all the properties for cash to Kinross.  In turn Kinross JVs the properties back on a priority basis to Sage.  That solves the cash problem and their's no further dilution as K would control the properties.

Either way it all points to a consolidation of shares and lower market cap for a period of time.  wasn't there a consolidation less than 6 years ago?