Hi Pockets
Thanks for the great update from the presentation you attended.Much appreciated by all.
In my opinion (and happy to be wrong re this) but nothing will happen regarding a strategic partner, off take agreements or sustainable increased share price / market capitalisation until St George:
- Intersects a very thick major nickel sulphide node / vein / body, or
- Definites an initial JORC at Stricklands (or Investigators) and starts a cheap dig and truck shallow ore operation where off takers can commit to and potentially fund a defined ore volume operation.
Whilst I am extremely confident with the very successful DHEM methodology used for the last 3 years and all the excellent surveys, modelling and drilling that has been done to date to hone in on a major discovery, the exploration side continues to remain a hit and miss approach as it is reliant on a 3 inch drill hole approach that may continue drain the companies funds and dilute shareholders for many years to come.As such, a discovery is not guaranteed to occur before the options expire in 7 months and this needs to be factored in.Until St George hits a major resource or proves up the ore continuity the price will remain low, any future CR will be low (maybe lower than 10 cents) and our options will expire worthless in 7 months.
With less than $4.3 million in the bank and understanding that in 2019 the company spent to $11.02 million in operational activities across Investigator, Stricklands, Cathedrals, and then Fair Bridge, Radar and Fish Hook, I feel management needs to focus on the percentages and all spend needs to be carefully managed.Some of you may disagree with me but this includes the recently announced $55k survey spend for the new exciting tenement at Pattersons as the probability of this new tenement dramatically increasing the share price in the short term is in my opinion a very low probability and distraction at this point in time.Happy to be proven wrong but I would be holding off on all spend until the company has more funds in the bank through a higher share price CR or strategic investment.
I cannot fault management for the great work they have done today.It has been very hard going for them and the progress has been excellent.St George is a much better investment proposition with a much greater probability of success that it was 3 years ago.I cannot explain why the price is back at 9.6 cents after so much success but what I am confident in is that St George will be very successful.
For me the priorities moving forward in order of importance (until St George has more funds available) should be:
- Define an initial JORC at Stricklands (or Investigators) as this will put a value on the company that will hopefully value the shares at a much higher base than the current 9.6 cents. That base will then be sustainable based on the resource level and any exploration success will be a huge bonus. If management believes that there is a decent resource at Stricklands then go for it and define it urgently. It may also put the 24,579,714 listed options (exercisable at 20 cents) into the money and raise $4.9 million if shareholders elect to exercise early. I am hoping the JORC will be done by mid April 2020.
- Start a shallow mining operation by say June / July 2020. If St George just digs and trucks to other offtake processors in the initial stage then the capital outlay is minimal. The offtakers may even enter into a deal similar to what BHP did with Western Areas back in around 2009 where BHP provided $45 million up front to fund Nova’s success (I posted this article around 1 year ago). In addition, once the ground is opened up St George will know exactly what is there, maybe prove the continuity once and for all, probable upgrade the JORC and follow nickel sulphide veins to the source(s). This may also make St George self funding to potentially accelerate exploration, no more CRs, and will even be in a better position to negotiate with strategic partners. Who knows we may even get dividends.
- Focus on West End and Investigators North West Down Plunge as at this time this is the highest probability exploration play in my opinion. The 2019 drilling program results show the veins thickening and multiple veins at depth down plunge North West towards the top of the Cathedrals Belt and towards the Ida Fault. Some of us have been suggesting this for a year now so I welcome the news St George will now be drilling at West End.
- Fish Hook is worth a couple of holes to test the anomalies given the soil samples and potential to extend the East West strike but unless something exceptional comes up I would limit it to that.
- I would hold off on everything else including Fairbridge, Radar and Bullets as they are in my opinion low probability targets at this time, even though the recent drilling program hit the edge of several EM plates and recorded sulphides. This also applies to the new Patterson tenement. We just don’t have sufficient funds to go for everything and our share price is way too low to raise more funds at this time.
- I would also do a farm in agreement for East Laverton Gold asap as Gold remains hot and have someone else spend their money (just like WSA has 25% of our MA tenement and we are spending all the money exploring for both parties). I’d rather 25% to 40% of something than 100% of nothing given the funds needed to make it happen and probability of success. It will also improve our share price. I posted this though around 6 months ago.
These are my thoughts on how St George should move forward to succeed and the share price significantly improve a lot sooner than some of us think.
Let’s see what transpires moving forward.
Happy Days and Best Fortune to All Holders.
SandyC
(20min delay)