Q: Hi - Has your opinion on SEA gold changed at all?
5i Research Answer:
Yes and no. On one hand, its high per-ounce exposure to gold has of course helped it in this year's rally. The stock is up 69% YTD. Many other stocks are up more, but at least SEA is participating. On the other hand, our usual complaints remain the same: no production, negative cash flow, losses, and a strategy that is essentially 'own a lot of gold reserves but don't do anything with them'. Gold mines take a long time to develop, but SEA has been operating for more than two decades now. It does have $128M cash. Its assets are decent, and certainly with gold approaching $4,000 far more valuable. We would consider it OK, but not great.