To start with I really don't follow Saracen that closely. As I am a dog lover and only harbour the underdogs.
Saracen is not a dog rather an elephant. Above my pay grade. I keep an eye on it as I do for all the other gold stocks.
What is intriguing here is one side of the boat is seriously wrong. Either the shorts or the longs. Only time will tell. The shorts position is bit higher even after the Van Eck saga.
The company has a relatively low cash balance compared to its market cap but no debt( with a debt facility), the profit margins are very slim so far and lots of ounces are hedged at a relatively low Aussie gold price.
So either investors are betting on a very high gold price or a very low cost of production in the future. Or a combination of both.
Now people don't have to hate me for this. I'm telling as I see it.
In Jan-Feb I told the BLK people that the company was yet to prove its credentials, and everyone hated me for it. The stock was trading at 70c+ at that time and everyone was singing how great the managements were and their great plans to become a 200k producer.(not happening anytime soon)
I just hope Saracen makes a boat load of money and burn the shorts in the coming months.
All the best.
SAR Price at posting:
$1.16 Sentiment: None Disclosure: Not Held
