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)

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.