I agree that SGX is undervalued and unfairly undervalued. But as someone also said, so is KXL.
a few points to ponder ...
1.) the valuations of 2 years ago are gone everywhere. SGX ran up to $.75 with half as many shares as they have now simly on the prospect that they might have a potential discovery on strike with the hercules property.
Today that notion means nothing to any investor. And while much work has been done on the GE, there has not been any substantial evidence that there's a tonne (or even a few) of gold there. This is a long term project and market conditions are different.
We will likely (almost certainly) not get the same market reaction to any news unless there is a BIG surprise. High grade narrow widths are expected, they won't be a big surprise. Perhaps some bonanza grade results at either paint lake or solomon's pillars will be the surprise we're looking for.
Even the companies that are provide strong results are not sustaining their high SP after the first few NRs ... look at EVG, MTB, DEC and to some extent UW. They are all well off their highs after the initial drill discoveries.
The junior market today is very different than it was 2-4 years ago. Caution and patience are needed much more as the instant gratification is not only less powerfull but not enduring.
2.) I still dont get why either SGX or KXL would even entertain the idea of merging. KXL owns the largest land package in BG and Sage the second largest. Together they would own a money pit of payments to maintain licenses and would use up all of their cash to do cursory exploration on concessions to determine whether to explore it, abandon it or option it off. B
Both companies should be concentrating on the properties that have the most potential. Putting 2 companies together that have lots of potential and no real way of generate cash without dillution is IMO a recipe for disaster. They'd be spread way to thin and we would never see the full value of even the strong projects. This might be a potential scenario in a year or 2 (or three) when hercules has a defined resource and it is proven that the GE is another good discovery. It would make sense then as there would be economies of scale in developing that property ... but not now.
IMO if anyone is talking to Sage or KXL now it is a major producer (kinross seems like the likely choice) that has cash and is looking for the best way to get into the BG area with JV initially and expertise to strategically make the area work ... At this point it is too early for a major to take out the whole company but would likely entertain a JV to fasttrack a property that has significant potential. I suppose that's why we have heard nothing and we are waiting for deep results from paint lake and Solomons pillars .
3.) in looking at the ONT RMK merger which will also include a roll back of shares, that may be the trend in this area as consolidation continues. A share consolidation on it's own can be devastating but not always, especially when it is accompanied by some other significant event ... time will tell on this one
