Here is the first recorded presentation by new Sabina Gold and Silver (SBB.TO) CEO Bruce McLeod, mining engineer. The presentation was taped at Gwen Preston’s Metals Investor Forum in Vancouver on May 30, 2015.
Mr. McLeod was introduced by veteran junior mining analyst John Kaiser, who commented, “at forty cents, [Sabina] is not just a bottom fish watch, it is now a good absolute spec value buy and I will be recommending this, adding it to my list in the next few weeks.”
Sabina was a billion market cap company four years ago and has lost over 90% of its value since as gold prices and mining shares crashed. Mr. McLeod spent three months doing due diligence on the company before joining as CEO in 2015. “You do your due diligence on the way in, not the way out.”
McLeod attributes Sabina’s massive valuation drop prior to his tenure to fund flows, not bad news. “Every mining specific fund that owned us, they don’t exist today. That culminated with 40 million shares of index selling, because Sabina was on every index it was eligible for. Forced selling without any buying or liquidity it ends up, you’re in that bottom.”
“I am an explorer, developer and mine builder,” McLeod said. Describing Sabina’s Back River project, McLeod commented, “This has a mineral inventory of over 7.2 million ounces at over 5.5 grams per ton gold in Nunuvut.” The project has a ten year mine life but McLeod says that doesn’t include inferred resources or exploration upside, and sees Back River as a generational gold mining district.
Chuck Jeannes, CEO of Goldcorp, is interested in assets with greater than 5 million ounces with high grades in safe jurisdictions, McLeod shared. He thinks Back River is one of only ten projects in the world that meets those criteria.
McLeod says Sabina needs credibility to see a revaluation, which is why his company used $1200 gold and a 87 cent Canadian dollar in its recent Feasibility Study. “In terms of real price, there is a big benefit in terms of being a Canadian producer.”
The company will put out a revised Feasibility Study by September of this year supporting a smaller, higher-grade project, with a significantly lower capital cost, McLeod said.
Yesterday, Sabina closed a $1.3 million Flow Through financing at 50 cents per share that was wholly subscribed for by management and directors of the company. Director Jonathan Goodman stepped up for a $1 million order.
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Disclosure note, I hold a small share position in Sabina. This is not investment advice of any kind and may contain errors. McLeod’s comments were made in a forward looking context. Read Sabina’s profile on www.SEDAR.com to fully understand the risks. Also, always do your own due diligence and consult a licensed investment advisor prior to making any investment decisions.