Spec I just listened to the conference call - Jetson seemed very...

Spec

I just listened to the conference call - Jetson seemed very tired and admitted that he had some sleepless nights.

I think the market is rightly giving SBM a hiding for this report - but it seems other goldies are also sliding this morning (NST for example is well down).

SBM is cheap now if they can deliver on their Q4 levels, but I think they will fall a bit short. My expectation is that they will do around 20k ounces more than this quarter (16k ounces at Gwalia and 4k ounces at Atlantic Gold), and that will substantially reduce the AISC while providing a lot net more cash/reduce net debt.

In the meantime the market will take a wait and see approach and there could be some shorting and sell in May/end of year tax loss selling. It would not surprise me to see the share price reach $1.50-1.60, especially if the gold price comes under pressure.

SBM's share price is highly leveraged to the gold price - I expect the USD POG to go up in the second half of 2021. If the management can actually deliver on its promises than SBM is cheap for a 400k+ ounce per annum producer, with a market cap of $1.32 billion and a 10+ year mine life.

They have some headwinds - rising costs, transition issues at the Gwalia mine between contractors, filling the Gwalia mill to capacity, regulatory and COVID issues in PNG, progress at Atlantic Gold on its next mines and mining in winter, funding of significant capex spend, decreasing market confidence in delivery of outcomes etc.

The market got this one right by keeping the share price around $2.00 despite the recent $100/ounce recovery in the USD POG.

loki (ouch)