Sage Gold Inc SGGDF

RE:RE:Base Production Potential

[pipsqueak3]

DecNefTrades wrote:

snowtigerrr wrote: Here are some napkin projections based on the company's internal forecasts on their website which may give a rough idea of what SGX can produce with the current resource. This is undiscounted because the gold price and Canadian dollar are not static (gold is presently $1582/oz this morning) and the company will likely increase production capacity and potentially increase reserves materially within 1-2 years.

Gold Price: $1550 au/oz CAD
Base Production: 146,000 ounces over 7 years
Sustaining Capex: $21 million
Total Operating Expenses (hauling, crushing, refining, G&A): $143 million
Smelter Return: $6.5 million
All in sustaining costs: $1164/oz
Fully Diluted Shares Outstanding: 110 million (99 million common)

146,000 x $1550 gold = $226.3 million
146,000 x $1164 AISC = $170 million

$226mm - $170mm = $56 million EBITDA over 7 years ($0.56/share), or roughly generating $8 million EBITDA per year.

The current marketcap of SGX is only $16 million(!) which means this stock at only 2x 2018 EV/EBITDA. Despite the risks associated with bringing a mine into development, the project is now 2 months from production with many upside catalysts in play. My personal expectation would be for a share price between $0.50 - $0.75 on these base production figures with significant room for upside ($1+) should the gold price gradually rise and the company expands its production and proven/probable reserves over the coming year.

Hitting new holes, exploration drilling below the 225 level which previously yielded zones of 80+g/ton, officially pouring and selling gold, and eventually proving a larger resource should expand the marketcap to those fair values and potentially make SGX an even more attractive takeover target if it isn't already.

Excellent analysis, thank you for sharing

Lol at whoever is selling down here.. Easy pickings and will be taken out soon..