agree Kiwi, it is the value of the "dirt" that is key. BRM's 1.6Bt converts to marketable product of at least 417Mt which when priced at the UMC/BHP multiple of $2.77/t would give a mkt cap of $1.18B or $8.56/share + cash backing.
That is a direct comparison with a market transaction, and hence imo, BRM while needing to get rail access, does not have a demanding valuation for its resource on an insitu basis.
UMC was less progressed than BRM, albeit with better ore quality, but a lot less volume, so some swings and roundabouts, but about the same net position.
If you apply the avg $/t, you get even higher prices than those above.
An EV approaching $500m for 417mt is a lot more reasonable that plenty of stocks with an exploration target that are trading at $200m+ with no cash in bank. Further, the mgt team, although we have all had a dig from time to time, has displayed discipline to a level not normally seen in a junior.
Remember, some of the large caps were BRM's of the past, and the doubters were no doubt in force then too. Each to their own however, you go get share price performances like this from sure things.
BHP will be looking for growth options to imo, and BRM is probably best placed to be earnings accretive immediately with an exceptionally low capex requirement given their rail runs straight through the tenement.
Rail is the key, and the next 6 months will see this concluded one way or another now that the DFS is out of the way. Will be hard to see how the BFS can be concluded without it, so gut feel is that they have something up their sleeve besides their arm. I would love to know what those closed door discussions at the tribunal last year on rail access unearthed....
Now all we need is a director buying on market!
BRM Price at posting:
$4.00 Sentiment: Buy Disclosure: Held
