Another roadblock in the transparent flow of information to investors and the market about SGR is found in the current design and method of delivery for information located on SGR's "profile" page... see the notes provided on the screen-shot graphic below...

Click to Enlarge...

In addition to SGR. mngmt. being secretive about their Gold production... there is another major fundamental flaw in the flow of information to potential investors on the SGR web site... that fatal flaw is in the current design and delivery of key information pertaining to several key reports about the company... inorder to view several key reports about the company located on SGR's home page, potential investors are forced to potentially compromise the security of their computer(s) (see graphic below)... this extra level of risk automatically reduces the transparency of the company to the market... which in my opinion has partially contributed to the current discounted stock price.

There are additional major web design flaws on the SGR web site that I'll be identifying in the days ahead.

Click to Enlarge...

In my opinion... the turn around in SGR's stock price may be near... in fact, it may have already occurred... IMO, the key upcoming fundamental turning point for the stock will primarily be as a result of the impending production information forthcoming from the company... essentially, when SGR starts formally reporting it's Gold production, that event will essentially move the company from an "unknown quantity" to the beginning stages of a quantifiable "reporting producer".

However... once the company starts properly and transparently disclosing it's production info to the market... I'm guessing that the share price will have already moved to between the $2 - $3 range (maybe more)... I'm also guessing that the company is going to have to break it's silence on it's detailed production information in the not to distant future.

The technical indictors in the stock may already be forecasting what will be the inevitable break of silence from the company regarding it's detailed production info... several key weekly indicators are already showing early stage reversals of the recent lengthy intermediate trends.

Click to Enlarge...

From my notes during a conversation with a San Gold Investor Relations representative at the Vancouver 2007 Gold show last month... the San Gold I.R. rep. said to me;

* Current Gold production is averaging approx. 5,000 Gold oz's per month.
* 2007 production is forecasted to be between 60,000 - 80,000 Gold oz's.
* 2008 production is forecasted to be approx. 120,000 Gold oz's.

Unfortunately... I've been unable to find any conclusive information on San Gold's web site regarding it's Gold production to date... for some reason, SGR mngmt. seems to have decided to make the info extremely difficult to find... they essentially seem to be hiding their Gold production info from the investing public... which, IMO has resulted in an artificially depressed share price... see next comments...

For whatever the reason... San Gold has practically hidden from the public the information relating to it's Gold production since starting production approx. November 2006... don't ask me why SGR mngmt. hasn't been more transparent about their Gold production, because I don't know the answer.

In my opinion, the lack of transparent disclosure by SGR mngmt. surrounding their Gold production since re-starting production is one of the main reasons why SGR's stock price has "under-performed" Gold Bullion for the past several months... and to make matters worse, the lack of production disclosure by SGR mnmgt. seems to have played directly into the hands of institutional buyers, making it easier for them to manipulate the stock price downwards, while at the same time they continue to buy the stock at heavily discounted prices... just look at the chart below; the stock price has been "painted" downwards... while at the same time, the "accumulation" indicator shows the stock is being bought up...

Click to Enlarge...

If I had a much bigger position in SGR... I'd get my Lawyer involved to force SGR mnmgt. to start properly disclosing key information surrounding it's Gold production in a proper transparent manner to the broad market... which in effect, would start peeling away the veil of secrecy currently surrounding production at SGR.

IMO... based purely on SGR's current "alledged" Gold production; the corresponding potential cash-flow valuation alone for SGR should currently be close to the $3 or $4 level... however, because SGR mngmt. has chosen to make it's production info extremely difficult to obtain & verify in writing, the market simply cannot properly value the company, because in today's competitive and fast paced world, the market simply cannot easily find & verify the current production info on SGR needed to make safe & current valuation estimates... this is against a backdrop of an ocean of other mining companies all competing for those same investor dollars.

STOCK PROFILE - San Gold Corporation - Last main update Jan. 4/07; 

ABOUT SAN GOLD CORP;

San Gold Corporation is a Canadian Gold Mining company... it's head office is located in Manitoba, Canada... San Gold's mining operations are based entirely within the borders of Canada... San Gold Corp. has only just recently commenced operations in 2 mines... and exploration discoveries indicate the possibility of a 3rd mine from San Gold Corp. in the nearer term... San Gold Corp. is listed on the Toronto Venture Exchange under the symbol "SGR".

Major Gold companies are currently purchasing smaller high-quality Gold companies at a frantic pace due to the fact that most major Gold companies scaled back their Gold exploration efforts to near "stand-still levels" during the late 1990's when Gold prices weakened to just under $300 per oz., and as a result of the near shut-down in Gold exploration efforts by major Gold companies, many of these major Gold companies are now caught in a bind where they simply DO NOT HAVE sufficient in-ground Gold reserves to guarantee them a strong Gold production growth profile in the shorter-term... so now, in a scramble/effort to grow their shorter-term growth profile, many of these major Gold companies have simply resorted to buying smaller high quality Gold companies, this buying of smaller Gold companies is being done due to obvious risk & economic analysis, which shows generally; IT IS SIMPLY FAR LESS RISKY AND FAR LESS COSTLY TO SIMPLY BUY a high quality producing Junior Gold company with good Gold reserves than it is to GAMBLE on a high cost, very time consuming, and inherently very risky Gold exploration program, which statistically has less than a 1 in 1000 chance of making it to production... in other words, WHY GAMBLE on the chance you "might" discover sufficient/feasible Gold that has an extremely slim chance of ever making it to production when you can simply & safely buy documented in-ground Gold reserves with already established Gold production and cash-flow.

The reason San Gold Corp. will likely be a take-over target within the next 12 - 24 months is; there are very, very few quality lower-priced and lower-risk producing Junior Gold companies available in safe and stable jurisdictions that have sufficient production capabilities and reserve growth profiles that would be attractive enough to garner the serious attention of a large Gold company... when you analyze and combine San Gold's low market capitalization value, it's recent production re-commencement, it's current Gold reserves, it's short-term Gold reserves growth potential, it's long-term exploration potential, and it's existing mines, infrastructure, & other efficiencies, IMO, San Gold sticks out as an obvious possible take-over candidate... and because San Gold operates exclusively within the borders of Canada, it offers any potential Suitor a much "lower country risk profile" than the purchase of a comparable Junior Gold company with operations in 3rd world countries like Peru, Bolivia, Ecuador, etc... as it can be a major challenge to just consistently get the Gold out of the ground in a 3rd world country due to the multitude of risks 3rd world countries carry.

Pictures of San Gold's mining operations ...

San Gold Corp. itself is already an acquisition and turn-around story of sorts... only a couple years ago, San Gold Corp. was able to gain control of a fairly large previously operating Gold mine (the Rice Lake mine) which was shut-down by previous owners in the late 1990's when the price of Gold was averaging just below the $300 per oz level... during that time, investors were fleeing the mining sector and were flocking to high-tech companies and internet investments... so, as a result of the near abandonment of the mining sector from 1998 - 2001, San Gold was able to gain control of the Rice Lake mine for what in hindsight now looks like a give-away price... and since San Gold gained control of the Rice Lake mine, San Gold has also been able to acquire control of additional properties in the area, further strengthening San Gold's land holdings.

There are a number of things I really like/favor about San Gold Corp., chief among them is San Gold's low level of "country risk"; because San Gold operates entirely within the borders of Canada, it means the company generally enjoys a low degree of country risk... mining companies that operate in 3rd world countries are simply subject to a much wider/deeper degree of inherent risks... in fact, just one aversion of risk San Gold has been able to make by operating in Canada is; San Gold has been able to enter into very secure and very low priced long-term energy supply contracts (SGR mngmt. talk about the energy contracts within this audio interview), the low-cost long-term energy supply contracts are possible because Manitoba Canada is a "energy exporter"... Manitoba has an over-abundance of safe & secure energy supplies, and Canada is a stable political/business environment... energy supply contracts in 3rd world countries are generally subject to all sorts of price, supply, security, & longevity risks.

Another thing I really like about SGR is; SGR's main mining facility is located literally right on the edge of town, that town being Bissett, Manitoba. Being located right on the edge of a town offers certain benefits and infrastructure to SGR that are not typically available with the development of a new major mine, which are usually located in undeveloped/remote locations; developing a new mine in a remote location carries inherently much higher degree's of risks and costs. Being located right on the edge of town, part of SGR's labor strategy (in an increasingly tight mining labor market) has been to recruit from the local population of Bissett for workers... and while Bissett is a small town, it does have it's own Mayor, council, school, community firehall, ambulance service, recreational facilities, road infrastructure, etc...

Picture of San Gold's Main Mine & the Town of Bissett ...

What's important to understand from this photo is; the location of San Gold's mining headquarters and milling facility in relation to the town of Bissett... being so close to town gives SGR certain built-in cost savings and operational efficiencies not typically found during the early development stages of a new larger mine, which are usually located in remote locations.

Map of San Gold's main facilities and it's future Gold deposits ...

What's important to understand from this map is; the location and distance of San Gold's mining headquarters & milling facility in relation to SGR's future Gold deposits & exploration... note that all these locations are within a relatively short distance of each other... other photos I've seen also seem to indicate that the terrain between deposits look somewhat reasonable, and shouldn't be a major risk/cost in regards to transportation between future deposits and the main mill.

To me, San Gold looks like quite a unique company compared to most of the other emerging Junior Gold companies, thus offering shareholders in SGR a unique opportunity... IMO, as San Gold develops and reaches it's full potential, it looks like it's operations will enjoy several unique efficiencies not found in many other Junior Gold producers.

IMO, one of the biggest risks investors with San Gold currently have is; that a major Gold company acquires San Gold well before current mngmt. has the time to fully develop San Gold's cash-flow, potential additional mine(s), and the potential new Gold discoveries/deposits... because if a major Gold producer absorbed San Gold into their operations/shares now, the net effect to current San Gold shareholders would be an overall dilution of San Gold's unique characteristics simply as a result of SGR being absorbed into the shares of a much larger multi-national mining company.

IMO, if SGR mngmt. can competently execute their business plan, ramp-up to near full Gold production, expand their 43-101 reserve estimates, and clearly define and prove-out their idea's for future additional mines; sometime over the next 12 - 24 months healthy rates of  return may be possible on SGR shares... and even if SGR isn't taken out by a larger Gold company within the next 24 months, a successful ramping-up to near full Gold production and an expansion of the Gold reserve should add very healthy increases in value to SGR shares over the next 24 months.

FUTURE VALUATION ESTIMATES;

Instead of forecasting a single future share price for SGR... I've elected to provide a range of potential future market capitalization values based upon the company reaching 4 CONSECUTIVE QUARTERS of production at full mill capacity... however, note that even if SGR reaches full production, it wouldn't be reaching 4 consecutive quarters of full production next month, or even in 6 months, SGR is probably a couple years away from reaching that benchmark. It is ultimately from these future operating statistics yet to be generated by the company that will contribute in determining the future valuation of the company... thus my current analysis of future possible values for SGR is given in multiple possible variable ranges.

What can be calculated right now to help determine the future value of SGR is the current Price-to-Sales Ratio multiples of Gold companies that already have established track records of production and cash-flow...

... you can see through a broad measurement of Price-to-Sales Ratio's in the Gold industry that it averages approx. 12.14 ... so, by using ranges of the current Price-to-Sales Ratio multiples common within the Gold industry, we can make some rough forecasts of SGR's potential future market capitalization value... my forecasts are made under the assumption that SGR can ultimately feed it's 1,250 ton-per-day mill very near full capacity on an on-going basis... and to be safe, my forecasts below all assume SGR will only be able to operate it's mill at an 89% efficiency rate, and will only be able to obtain a 89% recovery rate on it's Gold ore... the 89% efficiency and recovery rates are conservative, and with good mngmt., these values may ultimately end up being slightly higher, however, at this stage, using a lower/conservative rate is a safer method of forecasting.

My forecasts below provide a series of estimates ranging on variables of;
* 6 grams per-ton Gold,
* 12 grams per-ton Gold,
* 18 grams per-ton Gold,
* 24 grams per-ton Gold,
* $500 per oz. Gold sales,
* $600 per oz. Gold sales,
* $700 per oz. Gold sales,
* Price-to-Sales of 5,
* Price-to-Sales of 10,
* Price-to-Sales of 15,
* Price-to-Sales of 20,
* Price-to-Sales of 25,

My forecasts below all assume a constant of;
* 4 consecutive quarters at full production.
* 1,200 ton-per-day mill operating at 89% up-time (efficiency),
* 89% recovery rate on the indicated grade of Gold ore.

Gold Ore Grades;
SGR mnmgt. in the past have been confident forecasting future Gold production with an Ore Grade containing approx. 6.5 grams-per-ton Gold... however, that was a little while ago, and much has changed at SGR since... SGR is currently nearing the end of the process involved in re-calculating it's Gold reserves, the new Gold reserve re-calculation should be released before the end of 2006... but even after the next Gold reserve calculation is released, it will already be obsolete because SGR has very recently been making a series of significant new Gold discoveries that will not be included in the next reserve update, such as; the Oct 5, 2006 news release that describes the 7.8 meter find at 21.6 grams-per-ton, and the Nov 1, 2006 news release that describes the 91.5 meter long by 1.6 meter wide find at 35.6 grams-per-ton... for my forecasts below, I'll be using a range of Ore grades starting at 6 grams-per-ton Gold and running through a range of 12, 18, and 24 grams-per-ton Gold... and as you'll see below, when you calculate future Gold sales on a 1,200 ton-per-day mill an increase in Gold grade from just 6 grams-per-ton to 12 grams-per-ton can make a very big difference in values.

Market Capitalization Forecasts after 4 Consecutive Quarters Operating at Full Capacity;

NOTE: the following forecasts are made assuming 1,200 ton-per-day production from the
current mill running at an 89% up-time, and an 89% recovery rate...
 

6 grams p/ton at $500 p/oz, operating at 89% efficiency & 89% recovery rate...

6 grams p/ton at $600 p/oz, operating at 89% efficiency & 89% recovery rate...

 6 grams p/ton at $700 p/oz, operating at 89% efficiency & 89% recovery rate...

12 grams p/ton at $500 p/oz, operating at 89% efficiency & 89% recovery rate...

12 grams p/ton at $600 p/oz, operating at 89% efficiency & 89% recovery rate...

12 grams p/ton at $700 p/oz, operating at 89% efficiency & 89% recovery rate...

18 grams p/ton at $500 p/oz, operating at 89% efficiency & 89% recovery rate...

18 grams p/ton at $600 p/oz, operating at 89% efficiency & 89% recovery rate...

18 grams p/ton at $700 p/oz, operating at 89% efficiency & 89% recovery rate...

24 grams p/ton at $500 p/oz, operating at 89% efficiency & 89% recovery rate...

24 grams p/ton at $600 p/oz, operating at 89% efficiency & 89% recovery rate...

24 grams p/ton at $700 p/oz, operating at 89% efficiency & 89% recovery rate...

NOTE: I've made the above forecasts based upon the current 1,250 ton-per-day mill capacity... however, SGR mnmgt. is currently considering the expansion of the mill from it's current 1,250 ton-per-day capacity to a larger capacity, possibly up to 1,800 - 2,000 tons-per-day capacity... if the mill capacity was expanded, the above forecasts would have to be increased accordingly.

RISK'S;

There are many risk's in the mining business... there is certainly no guarantee SGR will ever be able to feed their mill near full capacity and operate at a reasonable profit... and even if SGR does eventually reach a reasonably profitable level of operations at full capacity, the company will likely encounter unanticipated delays and set-backs before achieving that milestone... nothing ever goes as planned.

Some of the numerous risk's that can delay or prevent the company from reaching it's full capacity at a reasonable profit level include; adverse decisions by mngmt., unusual weather events, land-slides, flooding, mechanical breakdowns, equipment shortages, employee shortages, strikes, unanticipated environmental damage, permitting problems, local politics, Gold prices, hedging policies, Gold reserve replacement, Gold grades, mine life, operating at a loss, energy disruptions, energy costs, and more. 

DISCLAIMER:

WebPennys.com is not a financial advisor... and operates as a free source of Penny Stock information. The Publisher of WebPennys.com currently owns free trading shares of San Gold Corp. The Publisher of WebPennys.com is "not" being paid a fee of any type for doing a profile on San Gold Corp. The Publisher of WebPennys.com reserves it's right to buy/sell his San Gold Corp. shares at any time.

WebPennys.com has obtained it's information from sources it deems reliable and correct, however, the accuracy and integrity of any information listed-on or linked-from WebPennys.com is not guaranteed nor warranted by the Publisher of WebPennys.com... and further, it is the viewers/surfers SOLE RESPONSIBILITY to VERIFY the ACCURACY and INTEGRITY of any and all INFORMATION listed-on or linked-from WebPennys.com.