SXL VALUATION With all the pumpers and dumpers, it's always a good idea to remind yourself of the facts of this company. The reason the share price is so low is that only the Nash Creek property has an NI 43-101 report available, all the other propoerties (as good as they might be) will not have any value attributed to them until technical reports are published.
Based on Nash Creek deposit only, the values I calcuate are as follows:
| INDICATED | |
| Metal in the Ground (CAD) | $579,693,103 |
| Au Equivalent Ounces | 386,462 |
| Target Price (Based on Au Eq) |
.05 |
| Target Price (Based on 2.5% Metal in Ground) |
.07 |
| Price per Oz of Au Equivalent | $28.64 |
| | |
| INDICATED + INFERRED | |
| Metal in the Ground (CAD) | $667,434,202 |
| Gold Equivalent Ounces | 444,956 |
| Target Price (Based on Au Eq) |
.06 |
| Target Price (Based on 2.5% Metal in Ground) |
.08 |
| Price per Oz of Au Equivalent | $24.87 |
Target price based on Au Equivalent uses $25/oz since the deposit is still in development stage. Once a pre-feasibility study is done the value would increase to $50/oz.
The above valuations provide no value for current shareholder equity (cash, assets, less debt) which as of Oct 2011 stood at $9M (see their MD&A), and no value for Nepisguit or any other property.
The bashers here have done their homework and are accumulating, and the easiest way to do that is to scare you into selling your shares. Sit tight, once the NI 43-101 report on Nepisguit is published (when?) the above values will likely double. I personally plan to accumulate under .05 since it's a no brainer down at these levels. Even at the end of Oct 2011 when the world was coming to an end with the Euro crisis, this traded at .07!
Now, from a management perspective, Mike Taylor would do well to focus a little, stop drilling every property he has for the fun of drilling. Put the good ones through the cycle (pre-feasibility, feasibility, production) then use the funds from production to pay for drilling of the other properties. I assume that's what he plans to do with Nepisguit first, then Nash Creek.
It would also be a good idea to spin off the gold assets in Ontario as a separate business, and then sell it. As it stands the properties are getting no valuation in the share price, and this type of transaction might actual generate a bit of interest in this stock.
My general impression is that Mike Taylor is a good geologist, but not much of a business person. He needs to get Trevali involved, they at least have business sense. Combine the companies, Trevali gets a great geologist and good deposits in New Brunswick, and shareholders get a piece of Trevali. Win-win!
Just my opinion and observations.
Good luck in your trading.