San Gold shareholders will benefit from current market conditions through year end and into 2014

San Gold should be on your radar this fall.

The Canadian Province of Manitoba does not have a history of great gold discoveries.  That fact is changing at this writing, and maybe just an interesting footnote in the coming years.

  Last year, San Gold Corp reported a record production for the company in Q3 of 27,084 oz.  at it's Rice Lake gold Complex near the town of Bissett, Manitoba. (photo)

SanGold also announced a "50%" increase in it's gold resource base.  This was from it's 007 zone, a zone not even in the equation only two years earlier.

 This company continues to grow its production and its resource base, in the largest gold field discovery in Manitoba history. 

However, 2013 has been a very trying time for Sangold investors as the stock has plumetted from $1.11 to as low as .09c this summer. It traded this morning at 14c per share. The market cap is now at $47m

  Great investors from Sir John Templeton to Warren Buffett have often said that the time to buy is when there is "blood in the streets" and for long suffering Sangold shareholders, it certainly seems there is blood in the streets. I have been buying SGR shares all summer, tripling my investment in what I see as a solid, mid tier miner, with first mover status and a solid operation, in a safe and stable country with a history of supporting such mining endeavers. This, at a time when gold and gold miners are finding strong support in every market on the planet.

San Gold does not currently pay any dividend, as management continues to grow its operations, its production and its resource base in this growing mining district.  New gold discoveries in it's 007 zone (photo) should add significantly to it's bottom line and this stock should be trading much higher by year end. Estimated reserves are now at 2.5 million oz

Having regard to the gold majors propensity for taking over such growing operations, It would not surprise me to see Sangold swept up should merger mania strike the majors as the price of gold spikes into year end 2013.  Majors mostly increase their production and resource base through acquisitions as it is often cheaper for them to buyout such operations than it is to find and develop them.

Disclosure:  I own San Gold stock and I continue to average in on dips.

If San Gold is not on your precious metals stock radar, maybe it should be.

HP

About San Gold
San Gold is an established Canadian gold producer, explorer, and developer that owns and operates the Hinge, 007, and Rice Lake mines near Bissett, Manitoba, approximately 235 kilometres northeast of Winnipeg, Manitoba, Canada. The Rice Lake Project has a permitted, modern gold mill currently processing ore at a capacity of 2,500 tons per day, modern surface infrastructure including a licensed tailings management facility, and is connected to the Manitoba power grid system. The Company employs more than 400 people and is committed to the highest standards of safety and environmental stewardship. San Gold is on the Toronto Stock Exchange under the symbol "SGR" and on the OTCQX under the symbol "SGRCF".
For further information on San Gold, please visit www.sangold.ca.

Mid tier gold miner San Gold is on a tear heading into 2012

"These results provide a detailed account of one of the richest gold deposits ever discovered in Manitoba. It's extremely impressive that a gold deposit that wasn't even known about two years ago will be contributing 50% of our mill feed well into the foreseeable future," 

George Pirie, San Gold's President and Chief Executive Officer. December 20th, 2011.

 SanGold Corp. is a mid-tier Canadian producer of gold headquartered at Winnipeg, Manitoba. It currently owns the producing Rice Lake, Hinge and 007 mines and owns other gold mining interests in both Manitoba and Ontario, Canada.

Today's market cap is 606,000,000, up over 40% after yesterday's huge pop, with 312,677,000 shares outstanding. It has a 52 week trading range of $1.35 to $4.09 and is trading today under $1.90  Operating revenue is $75, 239,000, up 118% year over year. It has a three year return of 16.72%

8 Analysts have a buy recommendation on Sangold with a current consensus target price of $3.40 share.  Of course, that price was set well before yesterday's big news.  What was that big news?  Well it is the reason that the CEO George Pirie, made the above noted quote in his release yesterday. Basically, SanGold has released results of this years 200 drill holes at 007 and the numbers are astounding.  They represent the largest gold find in the history of Manitoba mining.  Here are some of those numbers:


 

• S922-11-036, intersecting 23.2 g/tonne over 11.5 metres at a depth of 362 metres
• S922-11-013, intersecting 110.1 g/tonne over 2.1 metres at a depth of 330 metres
• S922-11-049, intersecting 44.2 g/tonne over 4.3 metres at a depth of 348 metres
• S922-11-089, intersecting 63.0 g/tonne over 2.8 metres at a depth of 362 metres
• S922-11-091, intersecting 21.7 g/tonne over 7.4 metres at a depth of 362 metres
• S915-11-003, intersecting 11.8 g/tonne over 12.3 metres at a depth of 396 metres
• S915-11-024, intersecting 60.7 g/tonne over 3.0 metres at a depth of 275 metres
• S915-11-045, intersecting 45.6 g/tonne over 4.3 metres at a depth of 291 metres
• S915-11-084, intersecting 17.4 g/tonne over 9.4 metres at a depth of 269 metres
• S915-11-106, intersecting 18.1 g/tonne over 3.2 metres at a depth of 358 metres

 In an industry where  3 grams per ton is considered minable reserves, you can see from the results why 6 million shares traded hands yesterday and the stock jumped 40%.  With recent M&A action in this hot area
(2011 examples include: Eldorado buying European goldfields for 2.4B, Gold Corp buying Gold Eagle, Agnico buying into Pheonix, Agnico-Eagle buying Grayd Resources, Hedge Fund Luxor Capital buying Crocodile Gold, IAM gold announcing it is on the lookout for acquisitions etc.) I have become even more bullish on SanGold than I was even last month.

big miners have chosen the express route to increasing reserves by purchasing the known assets of their rivals rather than the heartache and headache of drilling core samples and filling out permit applications. San Gold is a growing, mid tier producer of gold. Yearly revenue is now 10% of market cap, new discoveries have increased the resource base, production will hit 100,000 oz in 2012 and SanGold has an earnings per share growth of over 30% for the past five years.

2012 should bring a whirlwind of M&A activity in the gold sector, and I plan on being in on the ground floor.  How about you?

Disclosure: long San Gold (SGR-TSX) and Brigus Gold (BRD).

Related articles

• San Gold expands deposit base - drilling results (retirefunds.blogspot.com)
• San Gold finds more gold at Manitoba mine, shares jump (business.financialpost.com)
• Eldorado to purchase European Goldfields for $2.5B (business.financialpost.com)
• San Gold Reports Operating Income of $12.1 Million and Quarterly Profit of $1.0 Million (retirefunds.blogspot.com)
• Brigus Gold Reports Additional High-Grade Gold Assays (retirefunds.blogspot.com)

Gold and Equities VS the U.S. Dollar - US Treasuries are not a safe place to be!

Image by Getty Images via @daylifeI know that, when everyone starts to panic, most investors see the U.S. dollar as a safe haven. This week investors are piling into U.S. Treasuries as they have in the past during past times of fear and uncertainty. The problems in Europe have shaken confidence and the market plumeted yesterday on those fears. It would appear that, what the market has not done, is price in any hopeful sign that the European Union might actually come up with a plan similiar to the U.S. T.A.R.P. plan, which, in hindsight, was very positive for U.S. stocks, and which did not lose any money for taxpayers in the long run.  If the E.U. comes up with such a plan in the near term, there could be a dramatic pop in markets that are currently ruled by fear. There seems to be no pricing in of any good news that may eminate from Europe in the coming week(s).

In the mean time, the best "safe haven" of recent years, gold bullion, and by proxy, gold miners, have taken a beating this week. They have taken a beating only if you consider the price of gold over the course of the past month where bullion prices spiked as high as $1900. Compared to the rest of 2011, gold is still up a healthy 20% or more. It is only back to mid July prices.  That, my friends, is a healthy pullback, not This is not 2008 all over again. The fear is overblown. It may well be 2009 all over again as equities test those "generational lows" once again. I know this may be a contrary view, when compared with many market followers, but if I am right, this is the time to take the advice of Warren Buffett who famously said "buy when all others are fearful".

I am a buyer right now. A buyer of select equities in tech and pharma. A buyer of gold miners. A buyer of top Lithium miners. A buyer of select Canadian banks. If things go lower, I will buy more. Today I doubled down on small and mid tier gold miners like San Gold, and Brigus Gold. I even bought speculative stocks like TNR Gold and Nautilus Minerals. I bought more Talison Lithium. I bought more Rodinia Lithium.

I like Cenovus Energy and Suncor in the oil sector, TD Bank, RBC and BMO in banking.
I even like Manulife Financial as they are trading at an all time low this week. I like solid Techs like Intel, Microsoft, Apple and Google. I am watching HP since they announced thier new CEO today, Meg Whitman. I think there are great buys out there, and I am taking advantage of the irrational fear as everyone runs to the not so safe haven of the U.S. dollar.

I do not like the prospects for the American dollar, the Euro or, for that matter, most fiat currencies. Gold is bought and sold by central banks around the world, and it would not surprise me to hear in the coming weeks that countries like Italy have sold some of their gold stocks to pay down debt. Certainly that would account for the current weakness in bullion prices, which will rebound as fiat currencies, including the USD once again, lose favor with investors.

No one has a crystal ball, least of all this writer. However, it is those investors who seize the moment, who most often come out ahead of the herd. I hope you are one of those.

Happy investing.HP

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• TSX down sharply on economic worries (thestar.com)
• Jeffrey Rubin: Is Gold a Safe Haven From a Greek Default? (huffingtonpost.com)
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• Gold Stocks: Hedge Funds Love This List of Gold Mining Stocks (fool.com)
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• China Pulls The Rug From Under Europe, Halts French Bank Transactions, Makes Good On Trade War Ultimatum (zerohedge.com)

Gold Miners are in the drivers seat, during these economic head winds.

Image via WikipediaI like gold miners this summer!!!

I especially like gold miners that do not have any of their production hedged.

I like gold miners that are producing lots of gold right now!

I like gold miners whose production is increasing at this writing.

I like gold miners who have more than one producing mine!

  I like gold miners whose infrastructure and operations are sound, with no forseeable production problems!

I like gold miners that operate in safe mining jurisdictions, with no political overtones!

I like gold miners that are well lead by smart management who show their smarts in an ongoing basis, with great execution of clear business plans!

I lke gold miners that make money, and that will continue to make money, no matter what the market does.

  I LIKE GOLD MINERS!!!!!

For those of you who have read past articles, you know I am invested in physical gold and silver. Make no mistake, I view these as great investments in this environment. However, this year, it is the gold miners, especially those miners meeting the above criteria, that will out perform the markets this fall, and beyond.

The U.S. dollar is shrinking, and will continue to shrink in the long run. Over the past six months, the U.S. dollar has lost 10% against the Euro!  THE EURO!, where countries are lining up from the smallest (Greece) to  some of the largest (Spain, and now Italy) at the European credit window.

The European union could, on paper, save Greece and maybe even Ireland and Portugal. But Spain and Italy are both way too big to save. There is now no doubt that the Euro is in crisis and may not even survive, at least in its current form.

The macro picture grows dimmer with each passing month.  The debt ceiling crisis in the USA, and the muddying of those waters by both political parties, is becoming the 800 lb gorilla.  The Tea Party will have none of it.  Their patrons in the Republican party, at the insistance of the TP, are playing brinkmanship with the U.S. economy at this writing. They do not want to extend the ceiling and will not approve ANY kind of tax increase, even though every expert in the field feels tax increases absolutely have to be part of the overall solution to U.S. debt. Democrats are once again, sitting on their hands. The unemployment rate is printed at just over 9%, but if you believe that, I have a bridge to sell you. Fully 14.5% of America is now on food stamps!  (That's right, 1/7th of the pupulation)

In comparison, the debt problems of  Greece is barely a 40 lb monkey in the mechanics of global markets. Even if the U.S. debt ceiling gets raised in the medium term, where does that leave the USD, especially as QE2 ends, and there are not enough buyers of U.S. treasuries to keep up the charade.

The new Gorilla stumbling into the zoo of international finance  is the debt problems of Italy, whose economy, over 1 $Trillion and about 25% of the Eurozone, might be considered a 700 lb Gorilla.  Greece, Ireland, and Portugal , are one thing, but Spain and Italy are in a different financial league, and if they go, so goes the Euro. Spain has 20% unemployment right now and Italy is more in debt that any of the others.

The golden elephant in the room is, India, which now buys more gold than any other country.  China, viewing gold as an alternate currency, however, is catching up. They now allow their citizens, for the first time, to hold physical gold. The Chinese government has actually been quietly encouraging its citizens to do exactly that. Other countries increasing their purchasing of gold include Brazil, Germany, Russia, Indonesia etc.  European banks, and by proxy, U.S. banks are no place to invest right now. Get out while you still can.

These problems are not new.  The tipping point was circa 2008, and the storm was sidetracked by the biggest financial experiment in history. Yes, there will always be "some" good stocks to buy, but for now:

I want to own gold, and gold miners, of the best quality. I am buying them now!


My current picks:


1. SanGold
2. Barrick
3. Kinross
4. Brigus Gold

In that order.

Happy investing

HP

PS: If you want to speculate with the big boys....

Nautilus Minerals (Seabed mining)

If you want to speculate on the cheap....
Visit: TNR Gold projects, Alaska




News: Undersea Gold Company Nautilus mining for a lot more!

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• Commodity Watch: Gold Getting Attractive Again, But Not Silver (GLD, GDX, GDXJ, SLV, SIL, NAK, MIDSX) (247wallst.com)
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• 7 Secrets to Profitable Gold Investing, Part 1 (fool.com)
• SanGold increases MIll throughput/production (Retirefund)
• Fears about debt send gold price to record (seattletimes.nwsource.com)
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Updates: Asian investors stricken by gold fever - BNN

San Gold Completes Crusher Installation, Increases Mill Throughput

Image via Wikipedia
2011-04-27 08:00 ET - News Release

Canada NewsWire

BISSETT, MB, April 27

TSX: SGR  |  OTCQX: SGRCF
www.sangold.ca

BISSETT, MB, April 27 /CNW/ - George Pirie, President and CEO of San Gold Corporation (TSX: SGR) (OTCQX: SGRCF) is pleased to report that crushing plant upgrades have been completed and that test milling has shown a large increase in production capacity for Rice Lake Project mill operations. The first full week of operations using the improved crushing circuit (April 15 to April 21) realized an average of 1,513 tons per day processed, including an all-time daily record of 1,679 tons.  Recovery rates were maintained at 94% during this period.

"These capital improvements were completed ahead of schedule and have increased our mill's capacity beyond design specifications," said Mr. Pirie.

San Gold predicts 84% increase in output in 2011

San Gold Corp
www.SanGold.ca
TSX: SGR || OTCQX: SGRCF 

Right: SanGold Rice Lake Mine.

Over the past year, the Share price of mid tier gold producer, SanGold, has gone from $5 to $2.52

That selloff was, in my humble opinion, way over done, and San Gold is primed to out perform in 2011 and beyond. In the past week alone, the company announced its production of gold is up significantly in Q1 and it has a new, rich discovery at the 007 property. Production has increased at their Rice Lake mine beyond the capacity of their mill, with an abundance of ore waiting to be processed.

This is not a small prospector, but a mid tier, producing gold miner, with two producing mines and processing capacity which has to be increased this year just to keep up with its own production of gold. To this point, management has been tilted toward an overwhelming technical and production expertise, while not taking advantage of marketing to best advantage.  I believe this will change as new management takes the reins which has already begun.

Sangold highlights:

• Two mines in production - Rice Lake and The Hinge. The Hinge went into production within two years of discovery.
• The 007 zone has started bulk sampling.
• Mill production approaching capacity as new ore development comes online.

Consistent growth and market appreciation since 2005.

• Revenues tripled from 2008 to 2009 -- from $8.7M to $27.8M.
• On track to double revenues again this year.(2011)