Interesting decision IMO, hopefully because of TIMING and the GOLD CYCLE CLOCK. Certainly fair comment for and against here, & I tend to be in favour, because of personal expedience (I don't want to die of old age before market realisation of whats on offer with BCN's present set up).
Totally endorse Fish&Beer's view - consolidation is not always good for junior prospectors becos of CR and dilution, usually better for undervalued producers and that is exactly where we are at. While people will bet on drilling and rising gold prices, few do their own research or have a real understanding of either small cap miners or investment. Thankfully, our largest individual investor obviously does, and ATM I am very grateful for that.
I would back Colin's judgement and results being far better than mine!
Hi Joedirt, I always enjoy your posts, and yes physiologically, I believe there will be a positive % of investors who don't understand low margin mining, and have stricter personal investment guidelines and discipline, not to go betting on get rich quick "penny hopeful" small cap miners..... $1+ share price, minimal debt, sound 10 year reserves, regularly rolling bars out should attract a wider retail investor base = more demand, higher prices (again hopefully) BUT remember RETAIL INVESTORS represent 9% of the ASX trade by volume - all small caps probably less than 1% not a lot of competition at this end!
Also, I'm not a Fund Manager, but have mining interests, & also responsible for a reasonable sized private trust, & to the best of my knowledge there is no "$ mandate" on ASX fund managers, BUT there have been successful negligence actions against fund managers risking ASX investments outside the top 20 to top 50 listed companies - & not many in that group are $1 to $2 shares.
Likewise Yilgarngie, I appreciate your practical analysis, as you have pointed out elsewhere, BCN's present market cap of $118m, is close to the replacement cost of the upgraded mill and plant. You asked for comments on your next 3 year returns estimate at present gold price and I agree with your 2025 and 2026 profit estimates,, but even at present price, with the expected grades & increased production, I think more like $150m for the 3rd year as with a lot of smaller plants, there never seems to be much spare fat for the inevitable unexpected costs, plus higher inflation looks unavoidable.
BUT $150m pa profit with no debt would see me die very happy....
Regard TIMING. IMO time is plum right for consolidation, but I was not expecting such a high ratio ....again there can be arguments for and against.
The GOLD cycle/clock is IMO likewise plum right. The big end of town have already got into the Top10-20 goldies, Mid-tier are chasing takeovers and amalgamations and last off the rank as expected are the small caps. IMO better to be a $1 share now than 2.8c, even with it being purely physiological.
2 other matters that concern me, but getting too difficult to post about:-
1: Down ramping pests. As Trigger 26 mention a while back, appears classic day/short burnt trader activity. There is no certainty if a poster is a holder or not, or how many names they might or might not operate under. They seem to appear more in the small cap arena, & often with the same illogical repetitive 1 or 2 liners. One question seems to always apply - why would anyone continuously waste so much time for no apparent gain???? or maybe there is some particular grudge - ie former employee etc ???
2: Timor Leste project: I haven't spoken to the company, because IMO the present situation of highest ev ever gold price, sees far more importance in getting the plant upgraded and as efficient processing and recovery as possible, getting as much gold reserves tied up as possible, and getting as much gold rolled as quick as possible. Yes, our neighbours in Timor have some good results, and the more they discover and research processing & transport in a new mining environment, the more we will benefit, particularly while accumulating profits at home. The potential of Timor fully funded makes that $1-10 share look even better when consolidation occurs - we all hope....
I feel a few shareholders need to remember at either 2.8c or $1.10, you haven't invested in BHP. BCN is a very small company, that operates on a very tight margin, with minimal staff who, especially now, do not have time to run about attending investor shows and issuing media releases. BUT it appears, have SUCCESSFULLY got all the ducks lined up to take advantage of a consolidation - drawing investor attention a company that has little to no debt, a market cap that hardly reflects plant and equipment replacement value, anticipated $50m to $100m profit for next 2 years, has greater than 10 year LOM, and the bonus of a highly mineralised leases in Timor with $118 market cap...... for the doubters, read Rick Rule on small cap mining investments - are you a gambler or a well researched and patient investor???
DYOR - At my age I can claim diminished responsibility when the kids inheritance vanishes....
Good health & wealth RC.
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