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SGI.v/SUPGF C$.62 Superior Gold

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By Bobwins

Posted: Monday Jul 15 8:00:13PM 2019

SGI.v  +.02 to C$.84  Superior reported Q2 production of 23,849 vs 22,474 for Q1.  Underground grade and production improved to 3.36gm/tonne on 150K tonnes vs 2.79 on 124K tonnes in Q1. Hermes open pit grades declined from 1.06gm/tonne to .94 on reduced tonnage.  Superior stopped mining at Hermes in Q2 and will process stockpiled ore for the remainder of 2019.  This should reduce costs but does bring up the question of production levels in 2020 and beyond.  Overall Q2 was a small improvement from Q1 and Q4 2018.  Superior has yet to return to the profitability of early 2018 but is taking the necessary steps to return to profitability and improve cashflow.  The $100/ounce increase in gold prices should help for the rest of 2019.  Superior is a good example of a miner who is leveraged to the price of gold.  They are operating around breakeven now and will benefit dramatically from higher gold prices from here.  They have substantial gold resources of 3 million ounces and near 100K/oz/yr production so definitely deserve a higher market cap.

By Bobwins

Posted: Wednesday Jun 12 8:10:52AM 2019

+.04 to C$.70   low volume but gold is perking up again.  Superior promised updated reserve/resource report as of Q2 in last presentation so we should hear something soon.  Last report as of 2017 showed 2 million+ oz of resource.  Several hundred thousand oz increase plus enough reserves to keep production going at 100K rate should help market understand the potential for Superior.  Rerating will take an increase in the price of gold AND a solid return to profits for Superior.  Q2 needs to show continued progress towards higher grades and profits.  

Superior is still cheap and has good upside left.  They have another mill that could be reactivated fairly cheaply.  If gold moves higher, reactivating the second mill would become an obvious path to higher production and profits.  But they have to prove they can make money first.  

By Bobwins

Posted: Monday Jun 3 9:46:17AM 2019

gold is putting in a short term rally, bouncing hard from the 1280 area last week to $1325 today.  Superior is still not profitable so this bounce could be the catalyst to a return to profitability.  

At 25K/oz/qtr, Superior would drop an extra $250K to the bottom line for every $10/oz increase in avg gold prices.  

If this gold rally turns out to be more than a few days, typically gld moves first, then gdx and finally the juniors get some love.  So volume on Superior remains muted but should move up in volume and price if the rally continues.  Longer term, Superior has 3 million oz of gold resources to take advantage of higher gold prices.  Once they have solidly returned to profitability, the market should reprice the stock according to those profits AND the big resource.  Also if gold prices move up, Superior will likely reactivate the second mill that could be restarted at minimal cost and boost production.  

By rodball

Posted: Tuesday May 28 12:30:19PM 2019

Recent financials were impressive as well....

*  record quarterly production of over 10,000 ozs along with record revenue

* eps for quarter of US $ 0.02;  US $ 0.03 (6 mth)

* cash on hand of US $ 8.3 mil; working capital of US $ 22 mil.

* current sp around C $ 0.30 (yep, 0.30 with 0.03/share 6 mth earnings)

At any rate, I won't dilute this thread anymore, Bobwins.  I was just curious of your opinion on it, as it was another small cap producer...though even smaller than Superior...but got to like the numbers

Have a good evening!

By Bobwins

Posted: Monday May 27 10:14:57AM 2019

Rodball!  Fiore Gold is moving up!  IKN did a positive report last week.  

By Bobwins

Posted: Tuesday May 14 7:00:23AM 2019

SGI.v/SUPGF  +.06 to C$.71   Superior reports Q1 and shows decreased costs and improving grade and production.  Still lost .03 but definitely progress towards profitability.

By Bobwins

Posted: Tuesday May 7 7:29:20AM 2019

Re: Fiore Gold F.v/FIOGF  C$.26   I like the profitability and the goal of becoming a bigger producer but the near term upside doesn't appear that big.  With gold stocks down so much, I am trying to buy 100K/year producers at a cheap price and hope that gold finally does something.  Fiore has careful mgmt and they've done a good job to get to production with minimal debt and a decent share structure but a little too small for my current tastes.  That said, my current tastes haven't made me any money!  Good luck with Fiore!

By Bobwins

Posted: Tuesday May 7 7:13:08AM 2019

SGI.v  +.04 to C$.62  Superior updates reserves/resources and provides update.  Company appears focused on improving operational performance and moving forward with a good plan of attack.  Q1 may still be slightly subpar but April results sound encouraging.  Longer term, this should be a solid 100K producer at a bargain price.

By rodball

Posted: Wednesday May 1 5:26:07PM 2019

Hey Bobwins,

If you get time, give Fiore Gold (v.F) a quick look.  It's a small Nevada producer.  They should produce 40,0000 ozs + from their Pan Mine this year...Actually, closer to 45-50 k oz with the addition of a new crusher.  They have a market cap of approx. $25 mil. Canadian (currently around 0.26/share) with about $9 million in cash, and are profitable.  Pan Mine has about 8 years of reserves but they are adding additional resources greater than what they are producing.  They also have a nearby permitted property/resource with approximately 400 k oz resource as well as a couple SA properties.  Company is on a mission to be a 100-150,000 oz producer.  Anyway, like I said, give er a boo!

Have a good night!  

By Bobwins

Posted: Tuesday Apr 23 12:20:59PM 2019

Bought a small position in Superior Gold today.  Stock has been on a steep rise for the past week, rising from what looks like a bottom of C$.45 last week to today's C$.62.  A year ago, stock was in C$1.50 range so it's been a steady decline because of lack of interest in gold mining stocks AND underperformance by SGI.v.  Production has been below company forecasts, resulting in 20K produced in Q4 and 90K for the year vs 100K forecast and millions in profits.  Company says they have turned things around.  Q1 will still show a loss but production has improved a bit to 22K.  Like most mines, this operation has mostly fixed costs and so the previous decline in production has turned profits into losses.  

I bought this stock because it's dirt cheap.  100K producers should not be selling for US$45million market cap(98 million shares out XC$.62 X.75) .  

Company says they have turned things around.  Here is latest PR regarding Q4 and 2018 results.  Problems are outlined and discussed.

The main asset of Superior is the Plutonic Mine in Australia.  The mine has been in production since 1990 and has produced 5.5 million oz of gold.  Mine has been underground since 2005 and has averaged around 100K oz/yr.  Superior acquired the Plutonic mine in 2016 from Northern Star Resources.  Superior owns 100% of the Plutonic mine and 80% of the nearby Hermes open pit mine that was recently built.  Reserves at Plutonic are light at ~150K but resources bring total ounces to ~2million.  Obviously Superior needs  a lot of drilling to prove up more oz but the track record of the mine is good and conversion of resources to reserves should be fairly straight forward.  

Mgmt says they have turned things around and production recently moved to the 100K level at the end of Q1, resulting in 22K oz produced.  Assuming Q2 will be around 25K and Q3 and 4 are slightly higher, Superior should hit the 100K production mark for 2019 and become a profitable producer.  Given the low market cap, this should boost the stock by 2 or 3 times.  A rally in gold would obviously help but current prices holding should still result in a multibagger.

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