expecations

Considering the fact the most markets today have been hit by weak factory activity in China BTR holds relatively well.

Also the commodities (zinc, copper) have not lost too much ground today.

The interest in BTR though is still very limited and remembers me at some periods in the past six years were the daily volume shrink to almost zero.

Looking at the chart I would say that the region around 40 cents should be a strong resistance. We have touched this level several times in the last 4 years but obviously under different conditions. Meanwhile a lot has changed and the 40 cents that we have seen 4 years ago are not the same 40 cents like today.

However we all know that the SP of a company is not only influenced by the fundamentals of the company itself but also of the anticipated expectations of the market participants. In the case of BTR the expectations last year were rather high. Obviously a lot of people were of the opinion that the SP might hit several dollars level within 12 or 24 months. As we know for different reasons these expectations have been damped and have been reduced to a minimum. The typical story of a “fallen angel”.

If you are really interested into BTR then you should read through the broker recommendations of last year. You will then realize that obviously different things in the meanwhile have changed but basically the story (and the potential) is almost the same.

Just to make it clear: The company has sufficient cash in the bank. Start of production at Perkoa is imminent (I have the feeling that we will see some positive announcements from this side in the near future!). Glencore has invested quite a lot of money in Burkina Faso and as far as I know these guys are not stupid and therefore I am sure that the will make profit. Sooner or later but they will.

Then we have still Kitumba. Obviously the PFS will be decisive for the further development and it is still a long way to go if we are talking of “production”. Nevertheless we are talking here of a possible mining operation in the top quartile in a global context.

Furthermore drillings are underway and might extend the high grade core. Just a couple of weeks (end of June / mid July I guess) and we will know more. As we all know Mumbwa is always good for a surprise.

Scott by the way has indicated several times that he is convinced of the potential of Mumbwa. Especially Kitumba and also Kakozhi. The latter is the top target for further drilling and the outcome might be similar like at Kitumba. Just imagine what that would mean.

The fact that of all brokers that are covering BTR (besides Patersons) have not released any updates (please correct me if I am wrong) can only have 2 reasons: a) basically the story has not changed and there is no reason for an update or b) they are just waiting for news (Perkoa and PFS!) to make their minds up and release new recommendations. A rather typical pattern I guess.

A lot has been speculated about Scott leaving. I think that after roughly six years of intense working under sometimes difficult circumstances he just came to the conclusion that it is time to change. I have still not the feeling that the leaving is directly connected to BTR. It might be that Glencore had some influence. In the case that the PFS is positive (I am quite convinced that it will be) we all know that BTR will not be in the position to finance the project itself. I guess that Glencore will jump in and in this case I am rather convinced that Glencore wants to have some of their guys on board.

Personally I am looking forward to an announcement from Perkoa and I hope that this might trigger a modest bounce back into direction of the 50-60 cents range. Positive outcome of the PFS might trigger additional gains.

Overall I think that the SP in 12 months will be higher then today. Obviously if somebody has a different view I am happy to discuss.