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More to come here... but start with this:
SABRE GOLD MINES CORP.Corporate Presentation – September 2021 Fully Permitted High-Grade Near Term Gold Production in North America
Last updated, October 23, 2021:
Sabre Gold SGLDF / SGLD,TO is the product of a merger completed in September 2021, between Arizona Gold and Golden Predator. The pairing produces a company with two "flagship" projects: Brewery Creek in the Yukon came in, along with William Sheriff and Janet Lee-Sheriff, as a part of their contribution. The "nearer to production" Copperstone Mine in Arizona was the focus of Arizona Gold... and will be the primary focus of the initial effort in development at Saber Gold. Both of the two flagship projects have a long history as past producers, both have significant proven value in existing resources, and a lot of untapped upside potential in exploration, both with a potential for hosting multi-million ounce deposits.
But, both of the projects are also "well preserved" as past producers, having still active permitting, significant infrastructure still in place, intact, and "close" to being able to resume operations.
Brewery Creek is said to have historically produced ores still loaded on an intact leach pad containing an estimated quarter of a million ounces ready to be extracted... but the old mining operations have largely been reclaimed, so while the resources are proven, and intact, and while a bit of effort applied in modern exploration seems likely to prove much more that is worth mining, a resumption of operations will require additional effort in scoping and mine development.
Copperstone, on the other hand, has a fully permitted, intact and still functional mining operation in place that was simply "turned off" after gold prices cratered below the then current cost of production. That occurred just after former operator American Bonanza had spent millions on upgrading facilities and improving operations... leaving as close to a "turn key" restart operation as you are likely to find.
The unique circumstance of having multiple "intact" past producers with near term production potentials dramatically alters the approach one might take to optimally developing the value. Following the traditional approach to development... drilling to define the resources, proving the economic viability, working to prove the feasibility of mine construction, and scoping the potentials to develop plans for mining that address a sufficiently large resource to justify the development costs before making the investment... is upended when the time and money have already been committed and spent, and the mine has already been built...
In a typical mine development effort, the majority of the value eventually produced flows to paying the costs of development, to repaying the massive loans taken out to fund the work. Without those costs (and the inherent financial risks) it is fully viable to resume production at a mine while addressing a smaller proven ore body... without expanding the resource to some larger threshold to justify financing you don't need. But, that leaves the operational reality needed to attain viability poised well outside the market's expectations... likely leading to under-valuation... until production resumes and successfully proves the case.
Once operations resume and enable profitability... exploration to expand the resources, and spending on mine expansion to increase production can all be self funded from profits... but, you have to get there first... without taking on all the financial risks and costs of the traditional approach to development.
Sabre Gold's plan is to take that approach... first at Copperstone, then using initial successes. funding expanded exploration and re-development efforts, also expanding those efforts to Brewery Creek...
Unlike the case in most gold exploration projects... the approach requires that the risks at Sabre Gold are primarily related to potential mis-steps, delays and the financial risks inherent in the planning and execution of development tasks, first, and then in the restart of and management of ongoing operations.
As I was considering making an investment in American Bonanza at the time they were still working to overcome initial operating difficulties... and then through a second round of operational problems... after having already restarted production at Copperstone... I'm well aware of the nature of the challenges that existed back then. Awareness of that history provides a good place to begin considering the risks inherent today in Sabre Gold's attempt to re-activate Copperstone... and that should be the focus, given the rest of Sabre Gold's plans fully depend on delivering a success in that initial effort...
Golden Predator also contributes significant value in holdings of other properties, and in financial commitments by, royalties from, or shareholdings in other companies that have optioned Golden Predator properties in the Yukon... the most notable among them being the multi-million ounce 3 Aces project in southeastern Yukon, optioned and being advanced by Seabridge. That project is unlikely to contribute much in the near term... but, with Seabridge enabling success over time, it is likely to prove a significant contributor to long term value.
A proper analysis of the potential, and the current and near term value inherent in having merged the Arizona Gold team, and project, with the team and project of Golden Predator... requires understanding the people, and their history of accomplishment, first... as it is the people who create and contribute value... including by well and properly considering and timing their efforts. Saber Gold is led by a team of industry stalwarts, in with long and deep experience in exploration, in finding, and in development of value... They have a track record, and it is not hard to discover it. A significant part of that legacy follows them into Saber Gold as something more than experience... it includes ongoing obligations in payments due for properties sold or under lease to others, and continuing obligations in net smelter royalties... but, also, future potential in acquisition of new projects, or more "deal making" that is accretive of value.
My focus, here, will have me try to develop a proper understanding of the value of each of those underlying elements and potentials... and the risks and opportunities that exist to be addressed because of the people and the properties Saber Gold contains. But, my interest will also have me focus a lot of effort on the geological potentials and exploration upsides... where longer term value comes from... as that is consistent with my approach to finding outsized value in rocks, as part of discovering hidden value in mining stocks. The people matter most... but, when you do have good people ready to enable a success... the point is still in expecting that means they will continue succeeding in finding good rocks, and in developing value in rocks. And, if the rocks you have don't support that, it won't happen.
Sabre Gold's approach reverses the normal sequences of event you expect to see in a junior miner... but that reversal in sequences doesn't alter the aggregate in the requirements for sustained success... the requirements for success in transitioning from a development stage company to a successful producer... or the requirements to be met in winning the outsized rewards that are enabled by success in developing significantly under-valued assets. Unlike American Bonanza... Sabre Gold appears it is beginning the effort at the right time... at the beginning of a new commodity bull market... rather than near its end. It is likely we will see that "a rising tide lifts all boats" in the mining space over the next few years... What I hope to see at Sabre Gold is "proactive efforts timely delivering operational successes"... not a drift higher along with the markets as they revalue mining stocks.
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