Value Microcaps Junior Miners

[Bobwins]

SGI.v/SUPGF C$.62 bought a small stake in Superior Gold. Superior has had a rough year. They have underperformed their own forecasts due to a variety of reasons. They have fallen from the C$1.50 range a year ago and bottomed around C$.45 a week ago. Recently they announced better prospects for the coming year. They produced around 22K oz of gold in Q1 from their Australian mine vs estimates of 25K-27K. Grade was lower than forecast and that followed a subpar Q4.

So why buy? It's cheap!

98+million shares outstanding on the Canadian Venture exchange. At today's price of C$.62, that's a market cap of ~US$45million. They look to be a legit 100Koz/year producer.

Why is it so cheap? Underperformance in oz produced AND grade. Reserves are relatively low at 150K. Resources bring total oz closer to 2 million but obviously need a lot of drilling to confirm that total. However this mine has produced a huge amount of gold and the inferred and M&I should convert fairly nicely over time.

Company will likely report a loss for Q1 of ~2million. But cost cutting and better grade control should boost production to the 27K/qtr by Q3 and get them back on a profitable path. IF they can produce .03eps/qtr, this should be well over C$1. IF gold goes on a rally, this stock will really look like a bargain. BUT lots of IFS and proving to do by the company before the market will embrace them again.

Here is latest presentation:

https://www.superior-gold.com/investors/presentations/2019/