Just recently, Eric Sprott said in an interview with Marin Katusa (Casey Research) that he bought a gold mining company that is trading at 2.5% of its four year high while the company actually produces more gold now than several years ago. Via deduction, we know that he is talking about San Gold Corp. as four years ago, the stock traded at $4.5/share, while today it trades at $0.17/share (Chart 1). Indeed, on September 12th, 2013, Sprott Asset Management closed a private placement offering of 32,000,000 units at a price of $0.125 per unit for aggregate gross proceeds of $4,000,000.
|Chart 1: San Gold Corp.|
|Table 1: Key Metrics San Gold Corp.|
|Chart 2: Earnings Vs. Revenue|
|Chart 3: Equity Vs. P/B ratio Vs. Share Price|
|Chart 4: Gold Production Vs. Gold Price|
I presented San Gold Corp., a gold mining company with a potentially leveraged play on gold. If I'm right about bottoming gold prices, investors could gain multiples on this stock. Even a small investment would give high returns based on the analysis above. Renowned asset managers like Sprott Asset Management's Eric Sprott have put their money in this company and that shows that they have confidence in this gem.