AGM, page-199

My comments from the BGS AGM;

Rather than rehash what has already been well said by NL14 and others and what was in the presentation, I’ll just give my take on some of the issues that seem to be of interest.

I thought it was a very positive presentation to a well attended meeting including representatives from Hartleys, Minemark, Merchant and the Gas Super fund. And Hotcopper!

On the third party and takeovers and selling the project

WW was asked about the Appendix B “early negotiations with a third party” disclosure a couple of times by myself and others but would not say anything else about it. Some on this site seem to be reading all sorts of things into this but given no further info was provided, I would suggest re-reading what was said. In an obviously carefully worded statement we were told “The Company is involved in early stage negotiations with a third party relating to a potential acquisition or interest in the Bougouni Project.” So an interest IN the project, not OF the project. How people are interpreting this as management wanting to sell out, I have no idea. WW was quite dismissive of this suggestion and said the plan is to go mining. As was mentioned by @notlistening14, he said that as a larger shareholder, he wouldn’t be considering selling unless the share price was “many multiples” of where it is today.

It is probably likely that these talks re the 3^rd party making an acquisition (or interest) in the project are along the lines of Altura’s recent (8 Nov) much applauded agreement with one of China’s leading batterery manufactures who invested $40M into Altura. Isn’t this the type of deal we would want? Or some sort of cash upfront for offtake deal as other companies have done.

This can’t be done unless you enter into negotiations with third parties and allow some due diligence to be done. So rather than reading all sorts of negatives into this, we should be happy the directors are going down this path so promptly. Unfortunately they can’t say anything more about this now. Why not? Almost certainly because they signed a confidentiality agreement with the third party.

And where are they going next week? Travelling to China with representatives of Minemark to “progress relationships”.

Drilling

At the moment we have two rigs working 24 hours. The highly prospective West Zone ‘open’ extensions are being drilled first.

Results take a while because we are in the middle of Mali and the final assays are done back in Perth. This is one reason for the measured approach. Do we want an extra rig drilling a new target for six or eight weeks only to find out the first couple of holes had nothing in them and the rest of the drilling was a waste of time? No, so BGS will put six holes into the new target (to the south of the West Zone – see page 10 of the preso), wait for assays, and then come back if it is worthwhile. This sounds to me like a measured approach by guys who know what they are doing and don’t want to waste shareholder’s money.

Targets

No resource targets were given or implied. WW was asked about this and said conceptual targets were for new projects to give shareholders an idea of a project’s potential. Now that an initial resource has been proven it is all about drilling and proving up the resource, not guessing what you don’t know. To me this sounded like the answer of an experienced mining executive rather than a spruiker.

The share price

It is what it is.
Some want us to be like PSC and drill the hell out of the project, even areas with doubtful metallurgy that will probably never be mined. This swiss cheese drilling hasn’t helped PSC, whose share price has fallen from 7.1c to 2.5c. Or we should have four rigs like Kidman whose share price has fallen from 82c to 45c. Or more presos and conferences like AJM whose share price has halved.
Not too many of our peers are doing any better than us and in fact many are much worse. I’m not having a crack at these companies, all of which I also hold, I’m just pointing out that the approaches some here would like BGS to take hasn’t helped these companies to avoid similar falls in share price.

Selling on Monday

A few posters are talking of selling on Monday. I’m top of the buying queue at 29c so please do. All you’ll be missing is holding shares in the company with one of the highest grade lithium deposits in the world, who have proven up a world class 15m tonne deposit from just their initial 5,000m drilling campaign and who have just started a second 10,000 m program on the best part of the prospect and who have a (Chinese?) company doing due diligence of some sort as we speak. And this has all happened within eight months of picking up the project for a bargain price. Yeah, not much going on here.