In a Nov. 16 research note, Cantor Fitzgerald analyst Matthew O'Keefe reported that in a further derisking event, Sabina Gold & Silver Corp. (SBB:TSX; RXC:FSE; SGSVF:OTCPK) received the final license it needs—a type A water license—for construction and operation at its Back River gold project in Nunavut.
O'Keefe highlighted the Nunavut project's positive attributes. One is its high gold grades, which should average 6.3 grams per ton, he noted. Back River should produce about 250,000 ounces (250 Koz) annually for first eight years and 198 Koz gold annually over an initial 12-year mine life, with "low" all-in sustaining costs of US$650 per ounce.
A second positive is exploration upside. Efforts in this regard continue to yield gold discoveries and mineralization downplunge at Llama, which should "add additional gold resources and extend Back River's mine life," O'Keefe pointed out.
Third, the project is both a compelling investment and a takeover target, as it has strong economics, is now fully permitted, is located in a safe jurisdiction and offers exploration upside potential, wrote O'Keefe.
Upcoming catalysts that could move the share price are the announcement of additional exploration results and achievement of various construction and financing goals.
Cantor Fitzgerald has a Buy recommendation and a CA$3.40 per share target price on Sabina, whose stock is currently trading at ~CA$1.47 per share.
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Disclosures from Cantor Fitzgerald, Sabina Gold And Silver Corp., Company Update, November 16, 2018
Potential conflicts of interest: The author of this report is compensated based in part on the overall revenues of Cantor, a portion of which are generated by investment banking activities. Cantor may have had, or seek to have, an investment banking relationship with companies mentioned in this report. Cantor and/or its officers, directors and employees may from time to time acquire, hold or sell securities mentioned herein as principal or agent. Although Cantor makes every effort possible to avoid conflicts of interest, readers should assume that a conflict might exist, and therefore not rely solely on this report when evaluating whether or not to buy or sell the securities of subject companies.
Disclosures as of November 16, 2018
Cantor has not provided investment banking services or received investment banking related compensation from Sabina Gold and Silver Corp. within the past 12 months.
The analysts responsible for this research report do not have, either directly or indirectly, a long or short position in the shares or options of Sabina Gold and Silver Corp.
The analyst responsible for this report has visited the material operations of Sabina Gold and Silver Corp. No payment or reimbursement was received for related travel costs.
Analyst Certification
The research analyst whose name appears on this report hereby certifies that the opinions and recommendations expressed herein accurately reflect his personal views about the securities, issuers or industries discussed herein.
