Post by
fibonnaci on Nov 08, 2023 6:27pm
time for sgq to make another run?
as much of a red flag mongolia can be, imho sgq is poised to be up 100s of % once the full story plays out
chinese imports of mongolian coal have been up massively the last few months and will no doubt continue during the chinese cold season
as importantly, sgq's realized selling price of its coal has been 90$ and higher on occasions which is an amazing turnaround over the past few years, due in part to the higher overall coal prices but also to mongolias new exchange traded coal contract systems which came into effect this year
net result is that for first time in years, sgq is actually making some serious money, as witnesses by its profit warning issued a few days ago
yes their last q they were issued a 75$ million tax bill from mongolia and they have 250$ million in convertible debt but these could be easily paid off and or renegotiated to better terms given the money they stand to make over the next few years assuming coal market holds up which seems like a decent bet
back in early 2010s cic tried to buy sgq for 8$ per share, the deal was obviously quashed by mongolian govt... however i have a sense that the new owners of the 250$ million conv debenture are not as associated with the chinese govt as cic was and may be on better terms with mongolian govt than cic ever was
sgq is so close and stretegically located next to chinese border and with 50% ownership in the road connecting the mine to the border, there has to be more value to sgq than 20c
finally if you look at the chart of sgq the last time it ran from 20c to 1$ it also took a sharp dip to the 10c level just before it took off so this does look like a similar setup
shame it only traded sporadically on tsxv since sgq is quite heavily traded on hk stock exchange most nights
anyway, i feel a run coming in sgq... glta