OT Doug, spent some time viewing the San Gold presentation and then thinking about the PR they just posted with quarterly results.
My thoughts:
The site has great potential, the 10 grams per ton of gold stands out, the 14 drills working there to prove up more results. Experienced management, good analyst coverage, all star list of large institutional ownership.
Now the keys I see to the gold end of the rainbow finish - get the costs down and increase production to 80000 oz per year and higher in coming years. Costs per ton this last quarter of $862 per oz, noted that was 35% lowering than a year ago, so my calcs make the costs at about $1350 per oz a year ago. Way high, $862 not good either, get that down to $650 like they predict and maybe it works. I wonder why costs are that high, is it possibly because they have to mine and bring the ore from deeper? I believe Scorpio Gold is looking at $490 per oz costs. You would think that at 10 grams per ton, you could work costs low because you need to process so much less ore to produce the same oz, so something doesn't add up there.
They're spending at annual rates of $20 million for exploration and $12 million for general and admin costs, so if they're going to make a buck they have to show a lot more operating cash flow than they have so far.
Comes down to execution, whether management does what they say they will, as usual.
I do think the stock price will jump significantly if they lower the cost per oz, but will they?
I'm adding it to my watchlist, and thank you for bringing it to our attention. If nothing else it adds to our education to compare these different properties and their potential.
