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SAR - Saracen Mineral Holdings

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Positive action today, up 14% and moving in the right direction. Should have tipped it this month!



Daily 1 years shows a return of the action. SAR is a fairly low margin producer and for this reason their margin should theoretically benefit more from this rise in gold price relative to the lower cost producers such as TRY.

Added to the position and watching closely.
 

Starting sideways movement or continuing upward trend? :1zhelp: That is the question.

Disclosure I bought a small parcel so it's doomed
 
Doomed I said- sold at a small loss today - my only losing trade in a very successful last 2 weeks. The market is finally looking up (for how long?)
 
Out Too Soon said:
Doomed I said- sold at a small loss today - my only losing trade in a very successful last 2 weeks. The market is finally looking up (for how long?)
Click to expand...

Yes I have taken profits and awaiting further moves in gold before getting too excited. Better projects and results out there - for example, BDR; the SAR action has moderated lately and I hope to return shortly.
 
Alrighty,

I decided to enter the stockmarket game and picked four stocks from different sectors to learn with. My choice after some advice from a learned investment mob was that a good speculative investment in resources was Sarancen Minerals.
Sadly, I have had the stocks for a month now and they have been going downhill quicker than I can travel down a flight of stairs! Down some 27%
However, while I am fairly mystified as to why they have slumped quite this much in such a short time, I am quite confident that over the next 12 months they will double in value.
Any thoughts people? Your comments would be most appreciated.
 

A reason why you think they will double in the next 12 months will help you get some constructive debate
 
springhill said:
A reason why you think they will double in the next 12 months will help you get some constructive debate
Click to expand...

Thanks Springy, which is exactly what I wanted. 100% may seem optomistic but it does fit in with my strategy.

The reasons why I believe SAR will do ok is:

Loan capacity stable and financial no problem.
New Director appointed.
New high grade gold deposits coming on line over the next few months.
Infrastructure in place with no further high end capital expenditure required.
Cost per ounce down to about $760.
Resource sector an issue and therefore I think gold will become more attractive.

Let the feedback (slaughter) begin.
 

As I have said, this is not my area of the market, but here are some questions for you.

- Will any further borrowings be required in the future, if so how far away?

- Was the new director appointed because there was a resignation, if so why did he/she leave?

- What is the new directors track record in the companies he/she has been involved in previously?

- What is new directors experience outside of board level?

- Have you taken into account infrastructure 'variations and complications' that invariably arise? What extra would you anticipate SAR would need to be on the safe side? How would this possibly be raised?

- Cost down to $760, how long can this be sustained for?

You may not have access to many of the answers to these questions, but always good to be prepared.

Good luck
 

My initial thought is that if it drops another 23% and then doubles in value you will be back where you started when you first bought it !
 

Thank you for your questions Springy, it helps me to learn to explore a company more in depth, I appreciate it. So, in regard to your questions:

SAR are fully funded for upcoming projects up till 2014/15 so in a very good position and this comes off a continuing period of record production levels which are projected to expand significantly over the next few years.

The previous MD, Mr Guido Staltari, who has performed the duties of both Managing Director and Chairman, will remain as Chairman of the Company and will provide his part time executive services through a transitionary period. During that period he will assist the Managing Director and Board in strategic, commercial, exploration and development aspects of the Company’s future business.

The new Director is very well suited to the position and has been with Saracen for some 5 years. He is highly experienced in mining so I think the company is in very good hands. His appointment was an expected succession and he came from the position of Saracen's Chief Operating Officer which he held for the past 3.5 years with a long term tertiary study in Mining as well.

In regard to 'variations and complications that may arise'. I do not know what they may be, however from what I can ascertain, the company is in a strong position to weather any issues that may arise.

So that's it. I am quite confident that in regard to selecting a mining company, which I wanted to do, this one is worth following. It may not provide as high a gain as other sectors but I think it will be fine.
 
Boggo said:
My initial thought is that if it drops another 23% and then doubles in value you will be back where you started when you first bought it !
Click to expand...

Thanks Boggo, maths never was my strong point. :

What I do know though is that the stock price has dropped by over 50% in the past 12 months and I don't expect that to continue. I simply don't see any rational reason for it to do so. Even if it does, it will bounce back at some point. Historically, it has been up as high as $27 I think but that was a loooooong time ago and it is largely a different entity now in a different climate
 
burglar said:
"The answer lies in the soil"
10 years SAR vs the gold index XGD

View attachment 51767
Click to expand...

Thanks Burglar,

while my youthful exuburance may have caused me to purchase a little early, I think this data justifies my purchase and I will sleep a little easier tonight for it. Oh wait, I'm night shift................ :goodnight
 
AdamVW said:
... I simply don't see any rational reason for it to do so. ...
Click to expand...

I watched TV commercials for decades, trying to make sense of them.

Finally it dawned on me that they don't have to make sense.
They do, however, have to sell product.

In the same way, I tried to rationalise the Share Price Action.
Rational reasons simply do not drive Share Price Action!

Sorry to burst your bubble!
 
AdamVW said:
I simply don't see any rational reason for it to do so.
Click to expand...

Assuming rationality in the marketplace is like assuming intelligence in Government. It should be there but most of the time you are going to be really disappointed with the outcome.

If you are talking SAR when you say down 27%, some people would consider it a win just to recoup the losses.

I have seen companies get flogged for the most trivial of reasons and companies sky rocket for even less.

The market is a fickle and irrational place at times. All I am saying is prepare yourself for further losses, before a gain. If there is one.

AdamVW said:
Even if it does, it will bounce back at some point
Click to expand...

Not necessarily, it MAY bounce back at some point. That point could be next week or in 2 years time.

How long are you willing to wait for this, how deep a loss are you willing to take before there is this potential bounce?

What could you be doing with that money in the meantime where you could increase the capital instead of watching it decrease on the belief it will bounce back?

For example if you kept it I the bank at say 5% you are increasing capital base, the trend for SAR at the moment is down. Higher capital base and lower share price means you have leveraged yourself into a much stronger position once the downtrend has reversed and the opportunity to buy is clear.

If you learn to read the signs, you should be able to pre-empt it.

Mate, I am not busting your nuts just giving you food for thought.

I hope SAR explodes for you one day soon.
 
Thanks Burglar and Springhill

yes you guys are right and I did realise using the word 'Logical' was going to draw some flack. :rocketwho

I do understand the risk with this stock, however, it is not going to kill me even if the mine got hit by a meteor and completely dissappeared so willing to hang on and see what happens for 12 months, which was and is my strategy given the company's outlook.
 
Sold today at 0.41, was a real fun ride, bought at open on the 13th for 19.5. Along with TRY this was my first Aussie stock.

It's still possible for 0.60c depends on gold but it's currently running way ahead of gold pricing and similar companies less fashionable ones are running way behind.

Good luck guys, I will look to buy back in if there is a correction perhaps but I'm at 110% gain and I fear it will get altitude sickness, so taking my money off the table for now.
 
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