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Scorpio Gold - V.SGN

Discussion in 'Canadian Stocks Message Boards' started by Dan Thunderbolt, Jun 14, 2020.

  1. Dan Thunderbolt

    Dan Thunderbolt Active Member

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    Scorpio Gold is a very interesting junior gold miner which is flying under the radar. In my opinion the company has lots of intrinsic value which is not reflected in the current share price.

    Current market cap on a fully diluted basis (170 million shares) at a share price of C$ 0.09 is C$ 15,3 Million. The NPV of their shovel ready Mineral Ridge project in Nevada is C$ 147 Million at a price of Gold of US $1,750/oz. At a Gold price of US $2,000/oz the NPV is C$ 196 Million.

    An updated feasibility study completed in Jan 2018 outlines positive economics for processing the residual heap leach material and mining of higher grade mineralization in the existing pits. The study provides ~7.5 years of additional mine life at Mineral Ridge and 250,500 oz. life of project gold sold at a total cash cost of US$805/oz.

    Scorpio Gold is pursuing US$35M financing for the construction of a new carbon-in-leach (CIL) processing facility at Mineral Ridge. Recently Scorpio Gold announced the engagement of Artemis Capital Advisors LLC Company's financial advisor in connection with securing term financing in support of development of the Company's Mineral Ridge gold project. Artemis is composed of a team with over 45 years of collective mining investment banking experience and commodity markets expertise, having executed transactions with a combined value of over $4 billion. https://www.artemis.llc/

    Additionally, according to an interview with the Director of Scorpio the value of the functional mill at their Goldwedge property is estimated to be ~$4-5 M.

    Link company presentation:
    https://www.scorpiogold.com/investors/presentations/
     
    TheDude likes this.
  2. Dan Thunderbolt

    Dan Thunderbolt Active Member

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    As pointed out in my previous post the market cap of Scorpio is very low considering the intrinsic value of their assets.

    Scorpio’s main asset is the Mineral Ridge project which entered commercial production as an open pit & heap leach operation in 2012. Mining was suspended in early Nov 2017. However, residual but diminishing gold recoveries continue from the leach pads. Therefore they do not have to dilute shareholders on a continued basis as other companies do.

    The great thing about the Mineral Ridge project that makes it attractive is that it’s a restart. There’s no metallurgy or reserve risk. Overall, there’s not a lot of risk in the project beyond securing the capital for the new processing plant.


    Updated feasibility study Jan 2018
    Gold price of US $1,250/oz: NPV 5%: US$35.1 M ● IRR: 30.0% ● Payback: 2.9 years

    Price sensitive analysis (included in the feasibility study):
    • Gold price US $1,500/oz: NPV: US$70 M
    • Gold price US $1,750/oz: NPV: US$105 M
    • Gold price US $2,000/oz: NPV: US$140 M
     
  3. Dan Thunderbolt

    Dan Thunderbolt Active Member

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    The great thing about the Mineral Ridge project that makes it attractive is that it’s a restart. There’s no metallurgy or reserve risk. Overall, there’s not a lot of risk in the project beyond securing the capital for the new processing plant. Mineral Ridge is a brownfield operation on a site that has greenfield exploration potential.
     
  4. Dan Thunderbolt

    Dan Thunderbolt Active Member

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    I do not know when this stock will move but it sure will move big at some point in the future with the current price of gold. What I really like about the current situation concerning my investment in Scorpio is that management has now obviously a very high interest in getting the financing done for the shovel ready Mineral Ridge project. In addition, Artemis seems like a great partner to get the financing done. https://www.artemis.llc/

    Scorpio Gold Cash Conservation Measures in Response to COVID-19
    April 8, 2020
    https://www.scorpiogold.com/news/scorpio-gold-cash-conservation-measures-in-response-to-covid-19/
    Scorpio Gold Corporation (“Scorpio Gold” or the “Company”) (TSX-V: SGN) Scorpio Gold announces voluntary reduction in wages and salaries throughout the company during the Covid-19 pandemic and until a major financing is achieved to build the Mineral Ridge Process Facility.

    Effective April 1st, 2020 with the full co-operation and understanding of the Company’s personnel:
    • US employees voluntarily agreed to salary and wage reduction of 20%;
    • CEO, CFO and Corporate Secretary voluntarily cut their salaries by 50%; and
    • Chairman and Directors agreed to waive all monetary compensation to zero.
    The Company will exercise other cash conservation measures wherever discretionary funding can be eliminated or postponed.

    The overall annual reduction in costs will be approximately Cdn $1.6m and will remain in place until the Company is financed.

    The Company will continue to produce cashflow from the existing heaps at the Mineral Ridge Mine throughout 2020 whilst continuing to pursue financing in the form of gold loans, gold streams and direct loans to fund the expansion of production via construction of a new CIL process facility at the mine.
     
  5. Dan Thunderbolt

    Dan Thunderbolt Active Member

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    Below is a link to a very insightful interview on Scorpio with Murray Bockhold. The interview also deals with the intrinsic value of companies in general.
    https://stockhouse.com/opinion/inte...gold-mining-explorer-with-history-on-its-side

    Murray Bockhold is a strong advocate for shareholder and investor rights. Murray currently serves as the Court appointed Trustee for Gryphon Gold Corporation where he is spearheading a US$300 million lawsuit alleging bankruptcy fraud.

    This guy gives the company lots of credibility imo.
     
  6. Dan Thunderbolt

    Dan Thunderbolt Active Member

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    Only a matter of time until the share price of Scorpio will move up quite sigificantly imo. The numbers of the Mineral Ridge project are simply too attractive and convincing.

    Current market cap on a fully diluted basis (170 million shares) at a share price of C$ 0.09 is C$ 15,3 Million. The NPV of their shovel ready Mineral Ridge project is C$ 147 Million at a price of Gold of US $1,750/oz. At a Gold price of US $2,000/oz the NPV is C$ 196 Million.
     
  7. Dan Thunderbolt

    Dan Thunderbolt Active Member

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    In my previous posts I reffered to the numbers of the 2018 Mineral Ridge Feasibility Study. In 2019 Scorpio did an update of the mine plan and reserve and resource estimate.

    According to the November update the operating period increases from 7.5 to 8.5 years. The Life of Project Gold Sold is now 296 koz. Total Cash Cost $824.

    Considering the current low market cap of Scorpio it is obvious that imo we are due for a nice upwards movement rather sooner than later.

    https://www.scorpiogold.com/news/sc...utlook-at-its-mineral-ridge-operation-nevada/
     

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