|Home||About Us||Resources||Archive||Free Reports||Market Window|
Editor's note: If you want to learn more about Seabridge and the best ways to buy gold now, you can also read My Best Idea for the Next 12 Months. Or receive our free report, The World's Best Places to Buy and Store Physical Gold.
Friday, June 2, 2006
You missed a good show...
I hosted our Fourth Annual True Wealth Gold & Collectibles Conference this week in Long Beach, California. We had a packed roster of investment legends, plus the CEOs of a few mining stocks that I think are cheap, on hand.
Investors made a fortune if they took our advice the last time we did this conference...
I invited just three companies to present their investment stories at this conference last summer. The shares of all three of them absolutely soared in price (of course, the bull market in gold sure helped). The best performer of those was Seabridge Gold.
When I first recommended shares of Seabridge Gold to subscribers of my Sjuggerud Confidential newsletter less than a year ago, the price of Seabridge Gold was $2.64. Today, shares are closer to $10. But you know what?Shares of Seabridge Gold are just as good a deal today as they were when I first wrote about them.
It’s all because of the price of gold...
When I first wrote about Seabridge Gold, it was a bit of a long shot. The price of gold was about $440. At that price, Seabridge had a mountain of gold underground, but it wouldn’t have been particularly profitable to get it out. So it was a speculative gamble on the price of gold... One that paid off...
Gold is up by $200 to $640 now. And all of a sudden, Seabridge Gold’s assets look fantastic.
The Seabridge Gold story is simple...
At the bottom of the gold market, Seabridge Gold went around buying up properties with known gold reserves that the major gold companies wanted to get rid of.
Seabridge Gold ended up buying over 14 million ounces of gold in the ground, for less than a dollar per ounce of gold acquired. The mining giants Seabridge Gold had bought from had spent a combined $300+ million dollars in studying these properties. But at the bottom of the gold market, these properties seemed worthless. So the major mining companies dumped the projects for next to nothing.
Now the guys at Seabridge Gold look brilliant...
Seabridge Gold bought nine gold deposits back then. Let’s take a quick look at one now... called Courageous Lake. Seabridge Gold bought it from Newmont at the bottom of the market for less than a dollar per ounce of gold in the ground.
Seabridge Gold has tested it further, and now has 9 million resource ounces of gold in the ground there... worth nearly $6 billion dollars. Yet the market value of Seabridge Gold is only about $300 million.
An outside consulting firm estimates the cash cost of production to be around $279 per ounce at Courageous Lake. So as long as gold stays up above $600, this project is a no-brainer.
Smartly, Seabridge Gold doesn’t plant to develop the mine itself. It plans to partner with a major mining firm, who will take the financial risk. Seabridge Gold couldn’t identify who that partner is, but it said it has confidentiality agreements with four majors for this project (if I heard them right).
The major mining firms wouldn’t be interested unless this is potentially a major gold mine. And it is... it’s one of the ten largest undeveloped gold deposits in the world. And nicely, it’s in Canada, not some Banana Republic.
I could go on and on here... as Seabridge Gold’s CEO really laid out a nice case for the stock. Even if gold stays flat here for a long time, the stock should still go much higher. Since we try to keep DailyWealth nice and short, I’ll stop here...
If you’re interested in more about Seabridge Gold, the company’s CEO has made his presentation from our conference available to everyone at:
If you’d been a subscriber to Sjuggerud Confidential over the last year, you would have gotten my recommendation to buy Seabridge Gold when I first wrote about it at $2.64 a share. Now it’s $10 a share. This price is still cheap...
It gives us the ability to buy 18 million ounces of gold in the ground, for just $22 an ounce.
Shares of Seabridge Gold will be extremely volatile. But if you believe as I do that the long-term trend for gold and commodities is up, then this is one stock you want to own.
The symbol for Seabridge Gold in the U.S. is (SA). Check it out...
THE DECLINE OF THE HOMBUILDERS
It’s a classic case of stock prices falling before the bad news hits the headlines…
This week, the headlines were the worst construction numbers in two years. They say homebuilding is slowing across the country.
Our chart of the Philadelphia Homebuilding Index told us this news was on the way. This index of the major players in home construction is down 20% from its highs… and prices continue to look “soggy.”
An ugly picture for owners of homebuilding stocks (2-year chart):