SBM appears to stack up pretty well on the maths, and have been on my list to study - but I haven't really got around to it. When your buy an SBM share you are getting an ounce of projected production for $A1003 - the fourth ranked company (cf GBM as the second ranked company at $292).
The cost of production $ 470 is about the same as GBM $ 460 (yet to be proven) and total cost of operations is great at $535 per oz. When you buy a share in SBM you are paying $99 for an oz of reserve and $ 29 for an oz of resource, cf GBM no reserves and $ 38 per oz of resource (but I am sure that GBM have at least 500,000 oz plus plus that is close to resource - so their JORC resource doesn't give the full picture.
By my guess, it's pretty hard to see SBM going to far wrong, other than I have NOT as yet checked into a couple of blatant concerns, being; - $204 million of debt against $75 million cash. - their thinking when buying 10% of BDG, which in my view has to be a questionable decision, as BDG cannot make money easily for reasons of an expensive and probably unsustainable infrastructure.
The larger scale of SBM would be attractive to most (but it less attractive to me personally)
So to me there is more upside in GBM than in SBM, providing they engage properly and on a daily basis with the press, institutions and public etc - i.e. get out of this 5 minutes before 5pm last minute hash of compliance based communications.
GBM Price at posting:
5.5¢ Sentiment: Buy Disclosure: Held
