Stock May Benefit From Gold and Silver Sentiment

Source: Bob Moriarty 05/20/2024

Bob Moriarty of 321gold.com explains why he believes Sanu Gold Corp. could benefit from current sentiments around gold and silver.

As of my writing, the Daily Sentiment Index (DSI) for gold stands at 78, while silver's DSI is 80. These numbers do not indicate an overwhelming bullish sentiment that would hinder further rallies. In fact, based on my observations of investor sentiment on Stockwatch, it appears that market participants are skeptical about the current rally. The shares I own or follow are experiencing low trading volumes, with only a few thousand shares changing hands daily. This is not indicative of a market top.

When an asset class is at its lowest point, it is typically characterized by a lack of investor interest. Conversely, when an investment becomes the flavor of the day, and everyone is eager to pour money into it, that often signifies a market high. We are currently not in such a situation.

Gold is on the verge of reaching a new all-time high, and silver is just a few pennies away from its highest level in thirteen years. Despite these impressive milestones, investor enthusiasm remains muted.

In my search for undervalued investment opportunities that have yet to capture the attention of the broader market, I examined the shares I own or follow. My goal was to identify an asset that is exceptionally cheap and poised to appreciate once investors recognize its potential. However, it remains uncertain whether investors will eventually wake up to these overlooked opportunities.

After conducting thorough research to identify the most promising undervalued company, I discovered Sanu Gold Corp. SNGCF. This company operates in the world's most prolific gold district and boasts three projects of district-scale potential. To gauge investor interest, I visited the CEO.CA website a few days after Technical Analyst Clive Maund published a comprehensive and insightful article about the company.

CEO.CA provides a real-time display of the number of individuals currently active on a specific company's discussion board. To my surprise, the counter indicated that only two people were present on Sanu Gold's board. Considering that I was one of those two people, it became apparent that investor interest in this potentially lucrative opportunity was incredibly low, with myself accounting for half of the total engagement.

Sanu Gold is on the verge of concluding a reverse circulation (RC) drilling program at their Bantabaye project, having drilled approximately 1,500 meters. The collected samples have been sent to the assay laboratory, and the company expects to receive the results in the near future. The previous drilling campaign in 2023 yielded impressive gold intercepts, including a notable interval of 15 meters grading 11.4 grams per tonne of gold (g/t Au). These encouraging findings from the earlier program have raised expectations for the upcoming assay results from the current drilling effort.

Sanu Gold has an impressive land package, controlling 28,000 square kilometers in Guinea, which is considered one of the world's most prospective gold regions. The company finds itself in the midst of major players such as Newmont Mining, AngloGold Ashanti, and Nordgold, all of which have delineated multi-million-ounce gold deposits in the area. The relative obscurity of Guinea among small investors can be attributed to the tendency of these large companies to maintain a low profile regarding their mines and recent discoveries.

Looking ahead, Sanu Gold has secured funding for its 2024 drill program, which will include up to 8,000 meters of RC drilling. As results trickle in over the coming months, the company's ability to raise additional capital and continue drilling will depend on the outcome of these initial assays. However, even the preliminary results suggest a strong likelihood of discovering between 2 and 5 million ounces of gold. Moreover, Sanu Gold has two additional projects with similar potential.

It's worth noting that major companies operating in the basin have employed certain tactics to discover multiple million-ounce deposits over the years. One such approach involves paying attention to the activities of garimpeiros, or artisanal miners, who have honed their skills in locating economically viable gold deposits over centuries using only hand tools. Another interesting phenomenon is the role of termites, which dig down to the water table and bring material to the surface. While the gold grade in these mounds can vary considerably, the presence of any gold indicates the possibility of more at depth, making it a promising location for drilling.

Despite demonstrating excellent results, Sanu Gold's share price has declined by 80% over the past two years. However, when the market eventually recognizes the company's potential, Sanu Gold is likely to be among the first to benefit. As an early investor, I have owned shares since the company went public and have continued to average down my position.

It's important to acknowledge that Sanu Gold is an advertiser, and I have personally participated in private placements and purchased shares in the open market as recently as a week ago. While I am enthusiastic about the company's potential, I encourage readers to take responsibility for their own investment decisions and review Sanu Gold's investor presentation for further information.

Sanu Gold Corp. closed for trading at CA$0.11 on May 16, 2024.

Important Disclosures:

As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Sanu Gold Corp.
Bob Moriarty: I, or members of my immediate household or family, own securities of: Sanu Gold Corp. My company has a financial relationship with Sanu Gold Corp. I determined which companies would be included in this article based on my research and understanding of the sector.
Statements and opinions expressed are the opinions of the author and not of Streetwise Reports, Street Smart, or their officers. The author is wholly responsible for the accuracy of the statements. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Any disclosures from the author can be found below. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
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