BMA Gold has shattered market confidence in its current reserve position when it reported that infill drilling in Area 2 had failed to substantiate earlier surface drilling results and was likely to lead to a material downgrade to the Area 2 reserves. The company is now close to completing mining Area 1 which had returned a positive gold content relative to initial reserves estimates.
Stock Resource Recommendation Stock Resource has been a long term supporter of BMA Gold, having first recommended the stock as a Buy up to 30 cents on 4 February, 2004. During 2006 disappointing delays were partly mitigated by some exciting exploration success but there has always been an overhang of the uncertainty over its treatment options. We had anticipated that improving grades and a steady state mine plan could deliver some share price performance during 2007.
However, on the back of this reserve downgrade combined with uncertainties over funding and ultimately, being able to treat the ore, we have decided to take a loss and look for opportunities elsewhere in the market. Hence, Stock Resource recommends Members sell BMA Gold around 14 cents.
BMO Price at posting:
0.0¢ Sentiment: Sell Disclosure: Not Held
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