Hey there,
When it comes to commodities, it is very difficulty to pinpoint junior and/or exploration & development 'winners'. In SKE's case, it is benefiting from strong gold prices. In such an environment, the juniors will outperform which is what you saw out of SKE up 220% over the past year. However, as soon as the price begins to struggle, they will underperform.
That being said, SKE does look pretty good here. It has a NPV of $1.5B based on gold prices of $1,900/oz - this is based solely on Eska and does not take into account the SNIP property acquired from Barrick. Given its cash pretty much equals its liabilities, enterprise value is equal to its market cap. So it is trading at 0.632 times NPV - which is pretty good. Once again, this does infer a gold price of $1,900. If gold drops to $1,500 - NPV drops to $924M and it would be trading at just above 1 times NPV.
As you can see, the price of gold makes a huge difference in the price of valuation. The company is also not expected to enter production until 2023 at the earliest, so there is still plenty of room for uncertainty to creep in. It could make for a good acquisition candidate, but we'd never buy a stock for that purpose. Case in point WM has been rumoured for years to be a buy out and it has never materialized.
While it also looks cheap from an NPV perspective, it is also expensive on a per ounce basis. The company is trading at $154/oz from an Measured and Indicated perspective which is much higher than recent acquisitions which have been for typically below $100/per ounce, which I'd say is closer to fair value here.
SKE remains a good E&D company, but is only for the high risk investor.
Mat