Gary Sanchez first appeared on most prospect radars in 2009, when the Yankees signed him out of the Dominican Republic for a bonus of $3 million, which was third largest for a J2 signing at that time. Despite not having played as a professional by that offseason, Baseball America ranked him as the #7 prospect in the Yankees' system. At that time, they noted that Sanchez "has some similarities to Jesus Montero, with better defensive tools as a bonus." High praise back then to be sure.
Sanchez debuted stateside in 2010, going to the Gulf Coast League for the first two months of their season before finishing up in the New York-Penn League. As a 17 year old, Sanchez hit .329/.393/.536 with 8 home runs in 47 games played. The organization sent him to full-season Low-A Charleston for the 2011 season, where he hit 17 home runs in a relatively down offensive environment, especially given that he played in just 82 games out of 144 that year. However, the why of missing those games was concerning at the time, as Sanchez was suspended for two weeks that year for insubordination. He also missed time due to a thumb injury, but concerns about his makeup loomed larger than the injury concerns at that point.
The Yankees returned Sanchez to Low-A Charleston to start the 2012 season, and after 68 games he was promoted to High-A Tampa. Across the span of the season he hit .290/.344/.485 with 18 home runs, 85 runs batted in, and 15 stolen bases. He remains at Tampa currently, and will remain there for the rest of the season. So far, he's been hitting well, with a .264/.324/.448 slash line and 13 home runs in 84 games. Even though the batting average is down from his career averages, he also has posted a career low BABIP (.279) and has also reduced his strikeout rate (16% down from 22% last year), while maintaining a walk rate of almost 8%.
The reports on Sanchez to this point have been of a hitter who has shown above-average power despite his young age, and who is anticipated to have an above-average hit tool. Don't let the 15 stolen bases last year fool you, as he is considered a below-average runner, and isn't likely to provide any help in that category long-term. I wrote back in December that I thought Sanchez could provide a .280 batting average with 20+ home runs in the Majors, and I would say I still think that line is a solid possibility.
There are significant questions about his ability to stay behind the plate (similar to Montero), but the consensus seems to point to a player who has the potential to do so with more time and practice. It doesn't sound like he's ever going to be an above-average defender, but he doesn't need to be if his bat carries him as far as it could. Even if he can't stay behind the plate, his performance would still play at other positions in the corners.
With him staying at High-A for the rest of this season, I believe he will start at AA next year, and could see time in New York during the season. He will need to be protected on the 40-man roster after this season, which is practically a given. Once on the 40-man, opportunity could come for him anytime next year, but more likely he is up to stay at some point in the 2015 season.