SBM has frustratingly bucked the bullish gold trend through 2023 illustrating that all stocks within a given sector don’t move as one. Over recent weeks SBM has recut a deal with Genesis (GMD) which sees them hold on to the troublesome PNG & Canadian assets, however, they will receive a large cash component in the sale of their Leonora asset, earning $370m in the sale as well as picking up ~$170m in Genesis shares – the cash component will allow the company to pay down their debt, ending up with $197m in cash providing some balance sheet flexibility to turn the rest of the company’s assets around.
- We can understand the market’s concerns around the execution of the deal, and SBM’s ability to use the balance sheet boost to effect.
MM is neutral to positive towards SBM
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NB MM holds a 4% NCM position in our Emerging Companies Portfolio.
