sabina Sabina basically is a leveraged investment in precious metals versus paper currencies. (by leveraged, I don't mean debt, I mean that it can be expected to go up and down a multiple or 2 or 3 times the ups and downs in precious metals prices.
They have a nice cash balance but it does cost a huge amount to drill up there.
I think any actual mining is many years off, in the meantime my main concern about the company is that they are prudent in pulling in their horns and cut their spending way back once they reach a point where they are not finding enough more gold to justify the cost of the drilling.
Also along those lines, when they do pull in their horns I wonder how expensive will be any fixed costs associated with the rampdown. (cost of transporting drills out of the region- presumably there is a lot of expensive aircraft expense involved in that) Also I wonder whether they will incur substantial rental costs for any drills they wind up leaving sitting up there idle, which I presume they may do to some extent in order to have the flexibility to do further drilling at a later date.
Judging from this year's results so far, compared to the rich results they got in the last couple years, it appears the low hanging fruit may be about picked by now and it may be the point now where they ought to plan on a major rampdown of their exploration work.
I do have a lot of confidence in the skill of these folks. However, clearly this is a treacherous business that is hugely vulnerable to downturns in precious metals prices and, also, it is a huge challenge to develop a mine even with really good people at the helm, and particularly being in such a remote location.
My feeling is they need to ramp down exploration and then just sit on the deposits with a skeleton crew awaiting the point down the road where Xtrata or its successor goes forward with mining at Hackett River.