does bab need a new strategy?

Does BAB need a new strategy, given their current situation, which is one of estimated high Capex, high Opex, and high Cash Costs, with bulk low gold grades and low funds (when you look at the development cost requirements, circa $350 million), no current financiers, and no Joint Venture partners.

It is a valid question, though it could be argued, the question may yet be premature.

How strategic is the thinking of Bullabulling directors?
How business-savy are they?
How proactive are they?
Do they realise that in order to develop Bullabulling, a new strategy "may" be required?
And if so, will they produce a document for shareholders outlining the various strategic options going forward?

Here is a list of 10 possible strategies that Bullabulling could use in 2013.

Let us hope the board will consider all of these options, and more, because the share price has gone from 40 cents to 10 cents in only a few months, while most other gold stocks are now seeing some rise.

1. JV with Resolute, whereby Resolute transfer neighbouring tenement to BAB, plus cash, for a percentage stake in BAB, say 20% or more, with each contributing funds to the mine development. Resolute to have a board member.

2. JV with a Chinese company. Four or five of these have recently taken place, with the Chinese taking between 20% and 50% of the Australian gold company, and positions on the board. This is a real possibility given the recent Chinese buy-ins and the Market-Cap of BAB.

3. Go it alone. We see very little chance of BAB raising $350 million to build a 200,000 ounce per year gold plant, given the current world economic situation, and BAB's Market-Cap and gold grades.

4. Merge with another gold company on a 50:50 basis, preferably one that is producing gold, and hence profits. Who would be some likely candidates? And who is currently searching for a merger? For instance, Unity Mining has recently merged with Focus, currently producing 50,000 ounces a year, plus will produce another 50,000 a year from Focus, and they are still looking for further mergers. If they merged with BAB then the combined group could be looking at 300,000 ounces per annum by 2016.

5. Raise the cut off grade to 1 g/t and only initially mine the higher grade deposits. This would lower the JORC. Build a small plant that can be gradually upgraded year on year. Start with 50,000 ounces a year, and use the profits to pay off the loan as well as expand the plant. This would require a complete strategy shift from BAB management, old and new, who have always been focussed on building the biggest plant they can straight off.

6. Become a gold explorer ONLY. Prove up the largest resource possible, year after year, only with the intention of eventually selling the project, like most professional exploration companies, like Auzex Exploration, one of the companies BAB was created out of.

7. Purchase a near term gold producer, or a current producer, with a project of smaller scale, that is about to become profitable. Spend a year or two reaping the profits and using them to build the plant at Bullabulling. They could perhaps look at Mongolian Resource Corporation, or Austral Gold, or CitiGold. They have missed their opportunity with Noble, and Norton, and Norseman, all operations they would have needed to turn around.

8. Buy into a producing gold production project, without necessarily taking over the company. Manas recently successfully did this when buying into the Altyntas project of Central Asian Resources, which has an immediate toll treating agreement for the gold. Manas paid only $2 million, with the potential to make $20 or $30 million in the short to medium term. BAB could do with finding a deal like this.

9. Buy other smaller projects and diversity into other metals, like Copper, Nickel, Lithium, Iron Ore, Zinc and Graphite, with a view to share price appreciation, and short term profits.

10. Succeed in acquiring a heavily cashed-up Cornerstone Investor.

Alternatively, praying may help, perhaps a group prayer with the current shareholders, who have been practicing for some time.

Gw

I am surrounded by flatterers and fools. It can drive a man to madness.
Half of them don’t dare tell me the truth, and the other half can’t find it.
(George R.R. Martin - A Game of Thrones)

People often claim to hunger for truth, but seldom like the taste when it's served up.
(George R.R. Martin - A Clash of Kings)