Good vibrations I've taken another look at SGG's recent NR's, and I think there are hints that the news will be encouraging.
The NR back on 04-26-2012 stated the obvious points that:
"The Company's directors believe the numerous high-quality exploration targets at the Iskut Property are not fairly valued in the current severely depressed marketplace."
"To effectively advance the exploration targets, the Company will require significant capital expenditures to fund future drilling programs."
"The 2012 Iskut Property exploration program will focus on delineating mineralization, similar to the adjacent Snip Gold Mine, a past producer which yielded over 1 million ounces at an average grade of 24.5 g/t Au with a cut-off grade of 12 g/t Au "
Management was loath to dillute the company at such low share prices, but since dillution was necessary, they felt that existing shareholders should be given first crack at buying new shares. Well and good. But they discovered in June, when the rights were offered, that even with significant insider participation, the existing shareholders weren't willing to pony up a huge amount of money.
So, what should they do? Just what they've already planned to do -- focus on finding high grade gold. It's the only kind of discovery which would have any hope of raising the shareprice enough, so as to bring in fresh cash (at less dillutive rates) to finance 2013's exploration program.
If we look at the historical drill holes for SGG's current land, there's one location which has had high grade drill intercepts in the past, and that is the Gorge area, as seen on page 12 of their Corp Presentation. So, the obvious course of action -- the safest approach -- would be to focus their drilling in the Gorge area, with the hope of being able to publish some eye-popping results.
But they haven't done that. Yes, they drilled one hole at Gorge this summer, but the bulk of their limited work was at Burnie and Johnnie Flats, drilling around the EM conductors identified last year.
The NR of 07-11-2012 states that the funding was much less than anticipated, with the result that the 2012 exploration program would be reduced to drilling only 7 holes. There was no mention then of doing additional Borehole Pulse EM surveys in 2012.
However, the NR of 08-07-2012 advises that expenditures had been reduced, which would allow SGG to hire a crew to do BPEM surveys of all 2012 holes, plus selected historical holes.
After that, we have several NR's advising that the expiry of the 75 cent warrants has been extended to October 19.
Finally, we have the latest NR of 09-05-2012, which mentions that BPEM surveys were conducted on 12 holes this summer.
When I put all this information together, the body language that I'm reading here is that SGG's management feels that the previous BPEM analysis was successful, such that it was worth spending precious cash to do more BPEM surveys this summer. In other words, they must have reasoned -- from their visual inspection of this summer's drill cores -- that they had successfully hit the kind of iron sulphide gold-bearing mineralization that they had been targetting. Because, if their initial holes at Burnie and Johnnie Flats had come up dry, the logical thing to with their remaining cash would have been to head over the Gorge site and drill as many holes as possible there, to increase the chances that they would have some great news to report this fall.
So, this complements my earlier hunch about the Warrant Expiry date, ie, that SGG's management feel that they will have good news to report, soon, which will take the share price out of its current slump.