As the market continues to act in a crazed and delusional manner I have a suggestion for BRM management.
BRM is one of the very few mining stocks that can accurately control all of its expenditure for the next 12 months and as such gurantee its cash reserves. It is completely debt free and has no dependency on revenue or markets to raise cash or service debt, hence should be the lowest risk category of them all.
I think that if WR was to issue a statement to the effect of :
"BRM has now established its expenditure plan over the next 12 months and can assure the market it will still have $95M (for example)in cash reserves by the end of 2009"
This would eliminate risk, and assure the market, that even if sentiment has not returned and the assets are still worth nothing, that the cash backing per share is 70c (ie north of where we are now). I feel that BRM is effectively in control of its destiny here and as such should assert this to the market. This distinguishes it from other producers who are dependent on the volatility of the market to maintain their cash reserves and service their debt. BRM is distint from this group, but this is yet to be made clear. I gurantee of cash assets for the next 12 months could be just what the market needs to hear.
Anyone else agree?
BRM Price at posting:
49.0¢ Sentiment: Buy Disclosure: Held
