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Gold/Mining/Energy : Sabre Gold

SGLDF 0.163

+1.7%

Feb 7 3:00 PM EDT

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To: sense who wrote (1)	9/21/2021 3:50:00 PM
From: sense	of 35

SABRE GOLD – 23% Mineral Resource Increase to Gold Ounces At Copperstone, Arizona Mostly immediately noteworthy... is that the historic production from Copperstone occurred at an average grade of around 2.5 g/t, well below the grade that is reported here as the cutoff grade... at 2.74 g/t. More analysis required... but it looks like they just wiped out the prior resource estimate entirely and replaced it with one (that is vastly more conservative) that is based on "only the high grade". The new resource being declared is not one that is uses the 1 g/t ores to average in with the high grade ores to have it all balance out at a 2.5 g/t average... as was done at Copperstone historically ? And that means... while they do report an increase in the resource... what they don't mention... is that at the same time they reported a "nice" increase... they also just took half the gold that is there out of the inventory ? Why not use a 1 g/t cutoff... and report a resource that double (?) the size reported here ? If the answer is "the economics"... ? There are a couple of obvious solutions... buying down the 3% royalty being the most linear. But, waiting for and/or projecting a higher price of gold being another one... But, that mostly validates the "more conservative" approach taken now... as they mention that even reducing the POG down to $1500... has only a minor impact... while including the lower grade ores in the resource would tend to enhance the price sensitivity in unhelpful ways... Trust, but verify here... will necessarily include keeping a close eye on grade control... to make sure the costs are solidly in line with the grades... and that cost creep doesn't work to deliver any "gold leakage". Otherwise, they've enabled a very nice upgrade in the QUALITY of the resource... delivering a a big expansion in the grade, far more than in the quantity... and that's a huge reduction in the risk... making the project far more viable... more likely to be profitable sooner, and more sustainably...

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