Seabridge Gold Inc. (SA)

[Belek]

here was one of his buy recommendations July 30, 2015

today its worth,$19,950.00, I'l try and post some more later.

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Today we entered and executed an order to buy to open (50) call options
covering 5,000 shares of Seabridge Gold (SA) with a strike price
of $5.00, an expiration of January 20, 2017 and a limit price of
$0.90/share. We paid a total premium of $4,545.45 or
$0.90909/share. Buying these option contracts give us the right, but not the obligation, to purchase up to 5,000 shares of Seabridge Gold stock in 100 share lots for
$5.00/share at any time between now and January 20, 2017.

Including the premium paid for these options with the $5.00 strike price gives us a
break-even point of $5.91/share on the trade. Any amount Seabridge’s share price rises
above $5.91 will represent a profit on the trade of approximately 1.1% for every $0.01
above $5.91 the stock rises.

If Seabridge Gold simply returns to equal its previous 52-week high price of $11.64, our
options will be worth at least $6.64 and we will have a minimum profit of $5.73/share,
or 529% on our $0.91 purchase price. This outcome would turn our $4,545.45
investment into $28,650.00.

If by some chance, the stock were to reach the lower end of my current fair value
estimate of $45/share for the stock, our profit would be 39.09/share or 4,295% on our
$0.91/share investment used to purchase these options. This highly unlikely outcome
would turn our $4,545.45 investment into $195,450.00!

These kinds of numbers are the reason that so many people are willing to gamble buying
options. Our downside risk here is that SA stock will continue to languish over the next
18 months and we will lose our capital. However, I am willing to make this very
speculative investment because of the knowledge I have of Seabridge Gold and their
management and properties. Also, my firm belief that the price of gold is artificially low
at this time, reinforces my confidence in higher prices for shares of SA in the near,
intermediate and long-term.

This sort of position should only be opened with money you can easily afford to lose. It
is not the type of position I will take very often as I do not normally enter positions
where I know there is a real possibility of 100% loss. Having said that, I don’t often
come across opportunities where I believe I have a legitimate shot at a 1,000% return
either and a share price of $14.91 would produce that return in this case and deliver it in
18 months.

Best regards and better profits,
Ken