A thump up for you, Nikec. Glad I topped up another parcel...

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16/04/15

10:00

Post #: 15096717
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Originally posted by Nikec ↑

Hi Jid,
I have developed a slightly more complex spreadsheet which includes currency translation from the depreciation of the BDR, in addition my understanding is that ASIC does not include the debt interest and thus should be taken off from the remaining revenue.

My analysis at least, points to a simple concept, this company is significantly undervalued. Even using the most discrete figures, my model maintains a "BUY". There are a few fundamental reasons for this.

The first is that BDR has really cheap debt compared to some of the other gold firms out there, the risk of default is quite low, their ASIC cost are currently the lowest in Australia. Even with this most recent setback in production.

In addition the USD is expected to continue to appreciate, while here in AUS we are expecting interest rates cuts and thus a depreciation in the dollar. Over the last few weeks we have seen the BRL appreciate due to systematic changes within the country, i am confident it will remain above $3BRLfor 1USD which will reduce BDR's domestic costs of production.

Overall you are purchasing a firm with Australian dollars which has majority of its costs in the local BRL currency and it is getting USD for the sale of its goods. From a long term perspective if the status quo is maintained and there is little change in the gold price, currencies and debt levels this firm is a strong buy from my perspective.

Regards,

Master of Applied Finance
Office Paraplanner

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A thump up for you, Nikec. Glad I topped up another parcel yesterday.
Cheers to all holders

BDR Price at posting: 21.5¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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