Code:SOC
Name:Sovereign Gold
Sector:junior explorer
Total Shares (Listed and Unlisted):400 million [soon to be 800 million]
Company Facts:
As of 30 June 2015 ... completing a underwritten capital raising @ 0.002 to raise $780,000. This is to discharge debt and provide working capital. As a result management structure is to change with the underwriters taking 2 board seats [replacing 2 existing members]
MC will then be $2.5M with 800M shares on issue [@ last traded price 0.003]
There will be some debt still outstanding owed to a related company [also a significant holder], otherwise debt free. A further $800,000 cash coming to SOC as proceeds of a scrip sale in another company [paid in 3 installments over the next 9 months]. Admin costs seem covered for at least the next 12 months [~$250,000/year] and also working capital costs.
Fundamental Analysis
SOC has 3 highly prospective targets, all of which are being advanced over the next few months.
*Mt Adrah [NSW] ... Gold exploration. Has a JORC compliant resource of 700,000 ozs @ 1.1g/t. The company recently entered into a JV arrangement with a Chinese consortium to further explore this prospect. $1.5 million of drilling in exchange for 45% interest [a further $500k secures an additional 5% interest]. The drilling is to confirm a desktop proposal for an open cut mining operation and to attempt to discover high grade near surface gold. To be fully economically viable the project needs to find the high grade gold. It is present at depth, various historical high grade surface workings are on site ... high probability for success.
The Mt Adrah prospect is situated on the Gilmore Suture which, over its 200k length, hosts several operating gold mines [Barrick, Rio, Newcrest among others ... general good neighborhood]
* Uralla [NSW] ... gold exploration. SOC is free carried in a JV with a Chinese partner [SUGEC]. SOC retains 55% interest. $5M expended so far out of a total budget of 6.5M. Extensive soil sampling completed earlier this year. Drilling of identified targets commencing Q3 this year. A MOU for a further $15M is floating in the background which is yet to be exercised.
* Halls Peak [NSW] .. base metal exploration [zinc, lead, silver]. This is connected to the same set of tenements around Uralla and is potentially bound in with the MOU. At this stage SOC retains almost full ownership. SOC is exercising a NSW govt grant [$90k] to test a conductor @500m depth.
The conductor was first discovered in 2013. Prior to that the general area was mostly surface mined in the 1970's. BHP and CRA [now RIO] held pieces of the area but no one had control of the entire prospect. In those years base metal prices were poor. 10,000t of very high grade [DSO] ore was produced. Reports from those majors, at that time, considered the area might host a significant deposit of base metals. However, drilling in those years went no deeper than 200m and there was no understanding of the presence of the deep conductor.
The various small tenements have since been aggregated into 3 large tenements and SOC controls the whole area. The conductor underlies all of the earlier mines, is 14 sq k's in area. @ 500m depth and up 100m thick. The current drilling is designed to test if that conductor is mineralized.
SOC recently received some publicity in Global Resource Network magazine. That article gives a reasonable outline of the various projects.
Success in any one of these prospects will see SOC significantly re-rate as a company. Results from the 3 drilling campaigns will likely be announced to the market starting from the end of Q3 2015 [late August to perhaps early October].
** Please note ... I entered SOC into this comp late in 2013. At that time the SP was 21 cents and ~90M shares were on issue. In the intervening time management 'managed' to totally screw up the company's finances [by accepting funding via a 'death spiral' financing outfit] and compounded things by blundering with the drill ... consequently punters lost interest and the death spiral mob drove the price down flatter than a cockroach. The result is the current SP in no way reflects the company's intrinsic value.
@retiredyoung .... thanks for maintaining this thread. It is languishing a bit but I believe it has a long term future.
