I think by now it’s widely known that there have been significant M & A discussions with SGC by multiple groups. As a compensated consultant, I’ve known of it and felt the least I said about them while these discussions continued the better.
Per the company’s latest press release, those discussions were still ongoing. As noted, whether anything comes of them or not is not known. I don’t wish to inadvertently give somebody a wrong impression about them by saying or not saying anything specific and instead be very generic. Unfortunately, that in itself causes issues.
So I concluded the best thing for me to do is to make a comment here and then make no further comments until there’s further public comments by SGC management.
Given the size, grade and extremely attractive cash flow possibilities of one of SGC’s prime assets, it’s quite understandable why there would be potential suitors. As SGC’s CEO noted recently at a Vancouver conference, the Chinese are all over Eritrea. I don’t think it takes a rocket scientist to assume they may be one or more of the parties SGC refers to.
The key in the near term is successfully concluding negotiations with ENAMCo.It would be a major milestone and catalyst IMHO. I suspect I’m part of a long line of interested parties who believe such a successful conclusion is the beginning of the end of SGC as an independent concern. While it’s still possible SGC ends up becoming a producer, I think it will be difficult to fend off an attractive offer given the environment for juniors for at least the foreseeable future.
Please don’t ask me to comment as I will only do so on the blog and only after SGC makes further public comments. And for the love of God, stop asking me to comment on what others claim I’m saying or doing. I will make any and all comments – good or bad, here and only here.