St George Mining (nickel explorer W.A.)
MC $50M
SOI ~500M
Cash ~$3M no debt.
SP 9.7 cents
Drilling a 5000m campaign now with 1st hole results likely late next week.
The negatives...
SGQ is completely on the nose with holders and sentiment is pretty toxic. They are drilling to test some downhole EM readings which seem promising but previously the company significantly disappointed by missing the target late last year and compounded sentiment destruction by releasing some bad news they had been sitting on into the bargain. Consequently the usual enthusiasm for possible successful drilling is totally absent and instead people are positioning for failure. SGQ raised $7M mid last year at 8 cents and have about half of that left. Failure this time around and the next CR will be a painful experience. Confidence in management is low and the SP is not being supported.
The positives...
SGQ has been exploring this tenement for about 5 years and has built up a reasonable understanding of the geology. The attraction is multiple high grade pods of Ni occur near surface over a strike length of 5.5k's and there is an indication that could run to 16k's. The story is those pods have been fed from somewhere, although each pod is small the extent of them and the very high grades infers something quite large deeper below. The current drill campaign is based upon geophysics done last year which offered clues where that deposit might be. In the past SGQ has intercepted good grades at depth but is yet to hit a commercial discovery. The MC is $50M which puts it at the bottom of the range of its peers... a discovery hole will see a big rerate.
This is the announcement released a few days ago updating the market....
The risk/reward equation is a possible 50% loss on a failure but blue sky on success. Warning... I have tipped SGQ several times in the past and only once would you have made anything from it.
