bought moreBought 6000 more shares today.
Fortunately I am not a fund manager who has to explain why my portfolio went down. Fortunately unlike 2008 this time I have kept 50-60% of my money as cash on the sidelines, since I was expecting a market slump ever since early 2009 and it finally came.
Really all you can do in investing is try to gauge what a stock is worth and buy what's selling far below what you believe is an objective valuation for that stock.
Sabina will end the year with $150 million cash, a silver royalty conservatively valued at $300 million, and a 4 million ounce deposit of mostly high grade open pit gold. The 4 million may be up to 5 by then.
At 2.50 per share and 190 million fully diluted shares, that's a FD market cap of $475 million. Back out the 150 million cash that is 325 million. That's what the silver royalty is conservatively worth with the gold being valued at DIDDLY SQUAT.
Value is a tough thing to assess but I would say a valuable 4 million ounce gold deposit selling at DIDDLY SQUAT is a good bargain.
I do have concerns about their possible desire to mine Back River themselves. The explorer business model is the way to go. It worked on Hope Bay and it is the way to go on Back River. But that's not a decision they need to make until Xtrata develops the infrastructure, many years from now.