Without that expected upside, the deposit is truly just OK.. This has been evident for some time, but no one wants to see it. The value of the metal is buried by 3.5 years worth of waste to remove, and even then, the grade is middling. it is located in the middle of nowhere. KSM is 70 km from Stewart: SC is 250 km!
When I finally did a peer comparison in mid 2011, I was shocked at how absolutely average SC was compared to the hype I was used to. It barely shows up in the largest deposit list, and in it's weight class, it is quite average. Notably, the two major deposits I followed (DM and LCC) and invested in at that time have since been sold, one at a fire sale (DM), the other for a great profit (LCC). There are others on that list that will sell too, just a matter of time. Even if CUU owned SC outright, my guess is no major would touch it for a value that investors think it is worth.
I have a list of better properties than SC that are undervalued by comparison- that is why I think it has room to fall (either by a catalyst like consolidation or by the downtrend), and why the upside is limited unless you are priced in at the right level. |
