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This stock is a long term hold. 3 powerful forces are at work radically enhancing this stocks value. 1.The price of gold will keep rising. The real financial crisis is not subprime real estate etc. but the growing distrust of all fiat currencies. The Fed and central bankers can simply create dollars out of thin air. Paper money has no intrinsic value. With continued trillion dollar deficits and a brain dead Congress marching toward the Obamacare debacle will only add to the deficit. 2. The world and its 6.5 billion people will need food and as we approach peak oil, the cost of growing food and cost of fertilizers will continue to rise. SGCP is a large and growing agriculture company. 3. The continued development of Sierra Leone's infrastructure will lower costs and improve efficiency.
Some calculations. Nov 4 field report states eight figure income from carbon credits, so at least $10,000,000. But at fully diluted shares, 1 billion x .0012 = 1.2 million market cap. Gold at all time high. If you believe management and their field report, SGCP is undervalued by 100 fold.
This maybe a game changer. SGCPs problem is not a lack of gold deposits, but an inability to raise cash other than selling millions of shares. If they can obtain funds through the sale of carbon credits, additional equipment can be bought to increase gold production. It's great to make money off the global warming hoax.
Agree friedchicken. But what to do? At .001, SGCP has a market cap of $600k, but they have mining concessions which are potentially worth much more. They are producing gold, up to 75 oz/month and probably about 500 to 600 oz for the year. The problem is that they are undercapitalized. They need to join forces with a well capitalized partner or they need to find a 100 karat green diamond and sell it for 50 million.
Someone on this board told us about a friend in Sierra leone who overheard the Chinese describing US treasuries as toilet paper. The Chinese are very smart. They enjoy tremendous economic freedom. IMHO the US is going in the wrong direction toward socialism. Maybe 10 years from now SGCP longs will be vacationing in Sierra Leone, staying at a SGCP owned beach front property.
Sarshee, I saw that also. Just more evidence for the coming paradigm shift for the worlds economies. With the big O et al printing money like crazy and using this magical new money to buy treasuries and artificially lowering interest rates to artificially stimulate the US economy, who in their right mind will buy treasuries. The chinese are concerned, and they are the only voice Washington will listen to. But with the major expansion of the welfare state underway, there will be no fiscal restraint. The printing money and deficits will grow and the dollar will fall. Oil, silver and gold and food will rise. You could argue SGCP is one of the best plays on 2 vital resources, gold and food.
A question for the CC. Will the 1 million in financing be covered by gold sales going forward or a loan with a high interest rate. I'm hoping SGCP can negotiate a deal which trades a cash infusion for forward discounted gold sales going forward. 75 oz. for May is encouraging, especially if similar numbers continue during the rainy season months. If so, SGCPs operations will be self supporting. Has anyone noticed the absence of the form t after hours trades just after the close. Just a guess, but this may mean SGCP is done diluting.
Just a thought. The PR from Oct 2008 which is posted on this site: I wish it would be removed. The "ten fold " increase in production was wishful thinking on management's part (although I think they believed it at the time). It was that PR which will undermine any future PRs from the company, so I don't think it should be so prominently displayed here.
Given the latest financial info, and continued increase in OS, this company needs a white knight who can take an equity stake, bring in capital so that this companies vast mining concessions can be efficiently exploited.
On a more positive note, gold continues to rise. It will continue to go up as long as the Fed continues to print trillions with trillion dollar deficits. Who in their right mind would buy 10 year treasuries with a 3.5% yield. Look for the treasury bubble to burst. Gold will skyrocket and any company with GOLD will be bought in a buying panic.
Does management know any Chinese investors?
Sierra leone safe haven? Could be. As I watch the slow moving train wreck coming out of Washington, what constitutes a safe investment. Certainly not treasuries. With the Obama team planning trillion dollar deficits for the next ten years, and helicopter Ben printing money to buy treasuries (and artificially depress interest rates), look for a further strengthening in gold and silver. Eventually there could be a buying panic. With this panic, any stock involved in mining silver or gold, or any stock that has gold or silver in its name, ie Sierra gold, will move rapidly higher. Don't know when, but I think it will be sooner than later.
Continued dilution? Yesterday SGCP traded about 7 million shares in the .0010 to .0011 range. Then a fews minutes after 4pm eastern 5 million shares crossed at .0009. Someone earlier called this a form T trade. This trading pattern has been continuous for more than a year after last years high of .04, with a large block sell at the end of the day. In my conversations with John, he denies it was Sierra Gold selling for dilution, but what else can it be? Maybe it's the MM controlling pps. Until this pattern of a large block sale at the end of every day stops, pps will never recover, IMHO. Until someone can explain this, I have to conclude it's continued dilution, especially since AS was raised to one billion. In the CC with John, did this come up?
Colts, sorry about my ignorance, but what does "ungag the TA" mean? I know TA is transfer agent.
Wolf, good post. The massive dilution and increase in AR has me baffled. SGCP did well over the years keeping AS relatively low before starting to produce. Last month they mined 70 oz of gold; you'd think that would be enough to fund operations. One alternate theory I haven't heard is that Doug and John may have radically increased AS as a poison pill.
Wolf, you obviously don't own any stock in SGCP. Why are you here? Who is paying you? Why are you you wasting time posting here unless you're being paid?
In my conversations with John,he said he had a large investment in SGCP, over 10 million shares. With A/s now at 1 billion, he has destroyed his investment. Why? They either saw an opportunity worth raising money for rapidly or they needed the money to continue operations. But in February they recovered 70 oz. of gold or about $60,000, certainly enough to continue. I frankly don't get it. I would expect desperate measures during the height of the rainy season without any cash flow, not while they are mining gold. Is there anyone out there who can explain the conundrum.
A year ago SGCP briefly hit .04. Management has diluted shares by about one half, but we have obtained valuable mining concessions. With dilution, high from last year would equate to .02. So a million shares would be priced at $20,000, but with current pps, $1200 will buy those million shares. You'd think that 70 oz. of gold from last month would fund current operations, but selling and probable dilution continues. On the other hand, the mining concessions have value, and that value may be atractive to an investment bank willing to fund an expansion of current operations for future gold production. There is an incredible disconnect between the value and potential of this company if non dilutive funding and expansion plans are realized and current pps. Still with never ending drop in pps, buying feels like a roulette bet, and I'm not sure if the odds are between red and black or a bet on a single number. I appreciate John getting the FR out today.
Lookitupok, I'm not familiar with Form T. If Form T sells are dilutive sells by the company, what are Form T buys?
Maybe today we saw capitulation. At .0013, market cap is about $500,000, but SGCP has produced 170 oz of gold from one site since DEC. Add in the JVs and maybe it's higher. The mining concessions have value, the terraces in Pampana are estimated at around one billion. No debt, so SGCP is not going away. Hang in there longs.
Thanks bikeguy. eom
Kavits, what is TA? technical analysis?, toxic asset?,
Dow down more than 200 pts. Growing disgust with 1 trillion dollar pork measure. What I see is the growing world wide realization of the weakness in the dollar and all fiat moneys. Gold is the only safe haven, and SGCP with its mining concessions and gold reserves may be the most undervalued company on the planet.
When SGCP returns to over $.04, it's high about a year ago, sell a few shares and buy gold (or silver).
OT Sort of: With short term treasuries at 0%, and Fed funds rate at 0%, Washington is printing money like crazy. GB just lowered their rates to an historically low 1%. Even Republicans want to reinflate the housing market by giving 4% mortgages and a $15k tax credit, supported by our tax dollars and foriegn debt additional borrowing. (In other words they want to borrow money to reinflate the housing bubble). Democrats are close to passing 1 trillion dollars in pure pork and they will continue to spend dollars to battle the global warming hoax. At some point the Chinese and other foriegn investors will recognize the dollar is not a SAFE haven and they will no longer buy treasuries which supports the huge rapidly expanding US debt. The World will soon recognize the only safe haven is GOLD. (and Silver). At that point, any GOLD mining or producing company will explode in pps. Sierra GOLD corp, with profitable gold production, no debt, and expanding production capacity will benefit.
Just an observation. Premier, well capitalized mining companies typically have reserve to market cap ratios of about 4 to 1. Profitable juniors, about 10 to 1. For SGCP, the alluvial holdings in pampana are close to one billion. If you add in pampana hard rock, Sewa and Zimme alluvial deposits (which have not been measured) you can guesstimate another one billion. So SGCP reserve to market cap ratio is 2500 to one. Pretty high for a company that has no debt and has 2 dredges and processors in place producing gold. At some point the market will recognize value.
You're right Bikeguy. So we have about one billion in alluvial reserves in Pampana, plus pampana hard rock reserves, plus 2 concessions along the Sewa and 20 miles of the Mano river in Zimme. Sounds good to me.
SGCP hard rock reserves are about one billion. Plus 20 miles of alluvial deposits in Zimme and multiple other mining sites plus JVs. But market cap is less than 800k? Who said markets are logical and reflected real value? IMHO, markets are irrational and illogical and SGCP may be the best example yet. I'm long and I've been buying. If you believe in Al Gore, global warming and the collective intelligence of the current market price, sell. Otherwise, use your own brain. BTW, if you believe GM, Chrysler, Fannie, freddie, AIG, Citi, BAC, and 1 trillion dollars invested in pork is a great investment, buy US treasuries yielding 0%. I'd rather take a risk in SGCP and gold.
Gold price currently is $29,824/kilo
10 kilos would be $298,240 or about $300k.
The source of the gold determines SGCP's %. From a JV, SGCP gets 50%, but the other 50% can (or must?) be sold back to SGCP at a discount to the price of gold. Production from the Sewa, SGCP retains a higher %, 80% I believe. On the Zimme, it's higher still, 90% I believe per a conversation I had with John recently.
Agree Bikeguy. All that's needed to turn this company around is gold production. With only one processor on site, January numbers will probably not make the 10 kilos many expect. Anything over 5 will be positive, because Februarys, with 2 processors will be more. With positve cash flow, new equipment can be ordered, and operations expanded.
Also a perfect storm seems to be developing for gold. Recent events caused a flight to the dollar from other currencies; but with treasuries now yeilding 0% and US fiscal policy now being 1 trillion in pork, and the Fed printing money, rapidly expanding money supply, foriegners will stop buying treasuries and buy gold. In many currencies, gold is at an all time high. With the price of gold rapidly rising, any gold producing company (especially profitable ones) will benefit. Within a few months, SGCP will be "very profitable" (SGCP management). We just need to sit tight.
So if SGCP owns 700 acres for farming, and let's assume farming land in the US goes for a ridiculous $1500/acre, SGCP's land holdings for farming are probably worth more than SGCP's market cap, share holders get all of the mining interest for nothing? Value?
IMHO most retail investors have a simple buy and hold strategy. Find undervalued companies, buy and wait for them to go up. Since September of 2007 (around the time the uptick rule was cancelled by the bone headed SEC) hedge funds and institutions found they could make much more money by selling and shorting the helll out of stocks, wait for retail investors to panic and sell their shares. This stategy works even though the pps of a stock drops to unreasonable levels. For example, take energold drilling. (EGDFF). They made 3 million dollars in Q3 (10 cents a share) for a PE of 2.5. Cap ex is around 25 million. They have a net worth of 71 million, 41 million in working capital, 17 million in cash and no debt. How can a market value a very profitable company with no debt at one third it's book value? (Sorry to pump another stock) The point is IMHO SGCPs market cap of less than one million does not represent true value. A logical fair market could easily value SGCP at 100 times it's current pps.
As February approaches, look for SGCP to start moving back up. One processor will have been on site in the Sewa site, and the second will have tested the new Zimme area. Latest PR gave some vague guidance; "very profitable in 2009" and Oct 6th, 2008 PR: Later this fall the company will now have the ability to speed up production by a factor of 10 times or more. In contrast to the 1-2 kilos of gold that Sierra Gold produced per month using local methods, the new gold plants will have the capacity to produce 20 kilos per month. Our figures are based on 8 hours per day with a past recovery rate of 4.5 grams of gold per ton. The plans are to operate 300 days per year.
20 kilos is about $500,000. That type of revenue for a company with a market cap just over 1 million is huge. SGCP's business plan is simple and it does not involve mortgage backed securities or complex derivitives. Just gain mining concessions and utilize their dredges and processors to extract gold from the rivers. The great thing is that once this company is profitable, it will enter a positive feed back cycle where profits will be plowed back into the company; more equipment will be bought, raising revenues. New leases will be acquired, and the company will grow without using debt or selling more stock.
From latest PR, 1&1/2 kg of gold were produced in 2 weeks. That is almost 10% of the current market cap of SGCP. What would happen to Apple with a market cap of 81 billion if it had revenues of 8.1 billion in 2 weeks. It is what it is. Maybe next month we will have 10 kilos of gold in production, equal to one half of market cap. Maybe in 2 months, we will have enough gold equal to current market cap. Given current gold production, current pps is ridiculous. Given recent news, gold reserves are easily more than one billion, but pps is less than 1 million. That's 1000 to 1. Established gold or silver mining concerns have reserves to market cap ratios of 4 to 1. Sometimes the herd is wrong. .0037 pps is so undervalued it's crazy. Whoever proposed free market's were rational and reflected true value was nuts. Markets are driven by emotion and are therefore illogical. I'm in for the long term. If you want safety, buy US treasuries with 0% return and equity in FNM, freddie, AIG, and GM etc. Safety is an illusion. Buy what has value, and it's not US debt.
1 1/2 kilos of gold for the first two weeks seems disappointing at first glance, but remember the dredges arrived last summer during the rainy season. What dredging took place occured along the rain swollen river banks, an area which can be extracted by shovels by hand during the dry season. I'm looking forward to dredging in the middle of the rivers, when the dry season causes the rivers to contract and slow. In the PR, three new properties were acquired and Doug gave guidance of a sort, saying SGCP will be very profitable. The news, IMHO will continue to improve as the dry season progresses and more sites start production.
SGCP pps is similar to deflationary psychology: Why by now if you can wait and buy at a lower price. The problem with selling is that when pps turns, and heads north, psychologically it's very hard to buy at a price which is higher than one's last sale price. SGCP has spent 5 years exploring and building an infrastructure. Just as it's producing gold with dredges and processors, pps is at an all time low. The time to buy is when pps is so low, anxiety and fear makes you upchuck. Sell when euphoria sets in.
At $.003 a share, one months potential gold production is equal to market cap. This is either a scam, or the buy of a life time. I'm betting SGCP is for real.
The solution to the low pps is producing gold. The processors are in place and presumably have been working the last week. It is the start of the dry season, and dredges will be in operation soon. JV operations are starting. Reverse split or more dilution will only make matters worse. SGCP has very little capital requirements, and with a little time, will be profitable.
From John's most recent field report, "mining operations (dredging, processing and extraction of gold) will begin in Sewa next week." During last years dry season (Jan - June) gold sales totaled $151k and this was done without dredges or processors. Expenses were $256K. It will take only $100k more than last year to become a profitable company. Market cap is $924,000 (based on .0042 pps). I don't think I've ever owned stock with such great potential. Once the processors start extracting gold with a 10 fold increase in production, SGCP will become profitable with an income stream which will be used to buy more dredges and processors. Income will jump and there will be expansion into the Zimme district. IMHO, current pps is nuts.
Talked to John for the first time yesterday and got a better idea of how they plan to build this company.
A year ago SGCP consisted of a hard rock mining site (40 sq/km) which includes a segment of the Pampana river, a site for alluvial mining. From what I understand, most of the gold production came from the Pampana river banks, scooping up dirt and alluvial mining by hand.
In the past year, SGCP has added 7 JVs, 2 one mile concessions on the Sewa river and (what John was most excited about) a 20 mile long river concession which runs to the Atlantic ocean in the Zimmi district. The value and potential of SGCP has grown, though not reflected in pps.
This coming dry season will be different. As the rivers contract to half their width and as the rivers slow from 9 knots to 1, dredges will be placed for the first time in the middle of the rivers where the best alluvial deposits are located. SGCP won't be limited just to the river banks. The plan will be to dredge as much prime river deposits during the dry season as possible, and stock pile it for processing in both the dry and wet seasons.
John stated that the processors will probably be on site this weekend. Whatever gold is processed from the rainy season dredged material may underestimate gold yeild since it came from rain swollen river banks. The prime alluvial deposits will come when the dredges can operate in the middle of the river in the upcoming dry season.
I haven't seen this before. On SGCP's website, they report $152K in JV gold sales in the 6 months Jan thru June 2008 and a 6 month loss of $105K. This compares to a $549K loss for 2007. The $152K in gold was made by hand, no dredges, no processors. Fixed costs are incredibly low. The gold production via dredges and processors, once operational, will go virtually to the bottom line. Glad to be here.
Reading through the PRs, I think I'm getting a better picture of how production will proceed. 2 dredges are in operation, one on the Pampana river and one on the Sewa. The 2 processors clearing customs and are hopefully on site will be deployed, one on the Pampana and one on the Sewa. So there are not one but 2 production sites coming on line, the Pampana, wholely owned by SGCP, and Sewa which is a JV. The hard rock site which will be developed in the future, given enough cash flow is in the Pampana 40 sq./km consession. Does SGCP own those 40 sq/km land (pampna) or is it leased?
You're right. a large increase in number of shares would explain alot. If there are 220 million shares now, there were 220-175= 45 million then. 45M x .26= 11,700,000 market cap in Feb 2007 vs 220M x .005= 1,100,000 current market cap. So current value is 10% of Feb 2007 spike. Still quite a discount considering we're about to produce alot of gold.