Sabina Valuation Questions…If Sabina is so valuable then why does the market think otherwise? There is wisdom in the masses… and the argument that the share price is being suppressed does not acknowledge that there would be an opportunity then for other investors to buy-in cheap and a make a tidy profit!
If the Hackett River silver royalty is so valuable then why is that not reflected in a higher share price? Why did Sabina not sell this royalty and then use the “massive” cash proceeds to self-finance the mine construction / operations? Glencore has owned the ‘Hackett River’ Zinc property for more than ten years and there have been no further developments since the 2013 drilling campaign (Glencore’s 2021 Annual Report (262 pages) makes no mention of Hackett River and Glencore’s December 31, 2022 Reserves and Resources Report (43 pages) shows NIL proven and probable silver reserves. There is no mine; there is no current plan to develop this zinc property (silver is the by-product), and it may take seven to fifteen years to develop the mine (permitting, feasibility studies (numerous), financing, etc.) before any silver royalty payments are received.
Sabina received CAD$ 271,570,000 by issuing 191,698,764 shares during the January-to-September 2022 period for an average CAD$ 1.42 per share. During January 2021, the share price traded as high as CAD$ 3.45!
Sabina also signed-on to some very expensive financing options such as the Orion debt facility at LIBOR plus 5%-to-8% with a 1% standby fee; Orion US$75M gold prepay facility with 108,750 gold ounces to be paid in-kind (that is $142,500,000 “profit” for Orion at $2,000 per ounce!!!); and a 1.5% gold production payment to Wheaton after the deliverying 200,000 gold ounces (and this goes on until the Goose property is exhausted). These financing arrangements have a huge negative impact on Sabina’s valuation!
Sabina is in a “politically safe mining jurisdiction”… B2Gold operates in such places as Mali, Colombia, Namibia, and Philippines. B2Gold will average down its risk profile by acquiring Sabina! No benefit to Sabina though…
There is less than two weeks before Sabina is required to publish its 2022 financials…
There is less than six weeks before the shareholder takeover vote…
Will a knight in shining armour sweep Sabina off its golden feet… (the market has been so quite recently).