Post by
metalhead666 on Nov 04, 2023 11:10am
Thoughts on SKE going forward.....
SKE is having (had) it's MOZ selloff moment. I think the institutional tax loss selling is over and while there could still be some retail throwing in the towel it won't be much or for much longer. Come Dec/Jan SKE could see a sharp rebound with the "January Effect" kicking in as well as a shift in sentiment towards the group and a rising gold price that now has tailwinds instead of headwinds.
SKE took it hard lately. Unfairly in my opinion given the outstanding nature of the project but markets are like that. "Before mid month" is when the update FS is out. It clearly will show a higher Capex number due to inflation but the base case gold price will be higher as will the ounces to be mined. It will show the same robust world class project as the last FS did.
I have no idea if the drilling of the deeps will show much. I don't think duds will do much damage and some big hits proving the thesis could be game changing.
SKE needs to get the financing sorted out to remove that question mark and go forward with a construction decision. That will come but for now it remains an overhang
SKE never got as dirt cheap as MOZ did but it's close. At 20% of NPV at $2000 gold it's almost dirt cheap. The updated FS will confirm this. 400k ounces at ridiculously low AISC will be repeated in the update. They don't make projects like this anymore. Over time SKE will trend towards 1x NPV which stands at $2 Billion give or take. If you can wait 2 years or so SKE is a potential 5x bagger. As we get into Dec and Jan with the updated FS behind us and gold having the wind at its back now as well as a bullish shift in sentiment I think we can see $7=$9 CDN easily once more in the short term. Longer term with my expectation of $2500 to $3000 gold SKE is a $20 stock or more..possibly a lot more
There's no reason not to love the stock here. A lot of uncertainty will be put to rest over the coming few weeks and something akin to the 2016 bull run in miners is looking good. That change in sentiment saw many doubles and triples. There's no reason SKE won't participate.
SKE was not worth $13 per share when it traded there. It's also not worth $4.60 CDN now. At 20% of NPV it's cheap. In the fullness of time even if gold does nothing, it's going to 1x NPV or $20 if it isn't bought out first. It's an excellent takeover target with a great deal of exploration upside. And that's not counting SNIP or Albino or the "deeps discover" if there is one that even approaches the original ESKAY in grade and size.
So while it was irration for SKE to be a $13 stock it's equally irrational that it trades here. SKE represents excellent value currently with significan upside if you're patient. I think there's a good "trade" set up if you're so inclined but serious money to be made if you let it play out.
The FED and the economy are now tailwinds....gold could easily hit $2500 next year or more. The financials for SKE at $2500 gold are insane. It would have an NPV north of $3 Billion and a share price in the mid 20s at least.
Use this irrational weakness to build a position and look forward short term to the FS out within 2 weeks and the longer term progress of building a mine over an exceptional deposit.
Comment by
Shadow10 on Nov 04, 2023 9:44pm
Skeena should only be worth $1.00 Canadain as they are just a JV and wouldn't be producing for at least for 2 years or more.This stock has made many money for a long time with it's up and down. I don't care for CEO . I also own Skeena shares. He went to the university of Richmon https://youtu.be/sqSA-SY5Hro?si=FGpPGlK9dN5be-ZJ
Comment by
Shadow10 on Nov 05, 2023 5:04pm
If it makes it to $6 or 7 I'm out,