BELLEVUE GOLD (ASX:BGL) Value re-entry opportunity Key Points:...

BELLEVUE GOLD (ASX:BGL)
Value re-entry opportunity
Key Points: Imminent resource upgrade, maybe 2.4m ounces.
Price to buy: $0.50 or under
Sentiment:WAIT FOR THE DOWN DIP
In my last email about BGL on 3 September 2018 (here), I valued their in ground resource at $200 - $250 AUD per ounce based on comparisons with peers and valuations provided by Geologist and analyst Xavier Baud. Since then, the gold price has risen over $1000 AUD per ounce and the AUD decreased nearly 25%. At that time, the resource was 500,000 Ounces at 8.2 g/t. Current resource is now widely regarded as commercial at 2.2M ounces 11.3g/t, with a fully diluted in ground ounce valuation of $192 per ounce, putting the current market cap at a $150m discount (in ground value of $250 per ounce based on 2018 valuations when net gold price has increased 78%). However, I see the in ground per ounce valuation to have increased to at least $300 oz considering the $AUD 25% decrease, the gold price 60% increase and the resource now being commercial and of higher grade with most major banks forecasting higher gold prices. Additionally, Bellevue have had a historical discovery rate of around 100K ounces per month, my guesstimate is next pending resource upgrade circa July/August 2.6m ounces at a similar grade of 11g/t. If this is the case, using a conservative $250 per ounce in ground valuation puts the total MC at $650M or $0.79 per share fully diluted. At $300 per ounce the fully diluted SP at 2.6M ounces would be $0.95.
With current global conditions, I see gold as a relatively safe mid to long term investment in the form of physical gold and producing companies being the obvious first option for safety and growth. BGL being an explorer transitioning to developer, the next down dip on the ASX likely bodes poorly for BGL in the short term, but in the mid term, quality gold developers will likely be the next refuge for dollars seeking security and growth.