Sanatana, Game, Set and Match
I’ve written at some length about the legal issues between Sanatana Resources (STA-V) and IamGold. Sanatana won the case last November when IamGold simply dropped their request for an easement across the ground of Sanatana. There was another hearing in January to determine if IamGold should have to pay for the legal expenses of Sanatana. At long last the court rendered a decision and it was a 100% victory for Sanatana.
The court explained in a 21-page document just how they determined that Sanatana should be paid the $402,189 they were seeking. IamGold fought the claim but the judge made it clear that since IamGold filed for the easement and then dropped the case, they were responsible for the reasonable expenses of Sanatana.
The case and the effects of the case are important for some other reasons. Sanatana has been hammered both by the price of gold and the wholesale dumping of shares by Pinetree back in December of 2014.
From a yearly high of $.29 ten months ago, STA fell into a ditch when Pinetree tossed 20 million shares onto the market in early December. At the time, the shares could be had for a tiny $.025 apiece down from $.065 in a single day. The shares had been $.15 a month earlier when IamGold dropped their easement request.
When Iamgold bought Trelawney for $608 million in 2012, it was to acquire the Côté Gold Project now measuring some 8 million ounces of gold at a .9 g/t grade. The Watershed property is a joint venture between Iamgold/Trelawney and Sanatana. STA owns 50% and has an option on another 1%. At present STA is working on a 43-101 resource and potentially moving to a Pre-Feasibility Study to earn the extra 1%. IamGold obviously believed they could get control of the entire project through their easement application. Their theory was seriously flawed.
The Côté Gold Project offers one of the most compelling and leveraged bets on the price of gold and buying STA gives an investor even more leverage. IamGold has taken the position that they required the easement over Waterside for them to put Côté into production.
With a current market cap of just over $6.35 million Sanatana effectively controls the Côté project. I said a long time ago that IamGold should have simply bought Sanatana or at least the Waterside project. When the price of gold goes up and the low grade Côté gold project becomes more attractive, STA becomes even more attractive. If Côté was worth $608 million, I wonder what Waterside will be worth?
I have bought shares of Sanatana in the open market as recently as Monday. I am biased. Sanatana was an advertiser and may well be again. Do your own due diligence.