Hmmm - a casual slip of the finger deleted the content of my...

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lordofthewings

50 Posts.

38

07/02/21

14:50

Post #: 50773991
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Originally posted by goldbear77: ↑

@lordofthewings

I wouldnt regard the seeking alpha poster's view as persuasive. Dome Inc in canada was another example of the time and didnt have the same internal levers.

but you also need to consider context

the world is no longer monopole - all consumption signals do not flow from the US. Instead what we have now is a 2 stroke engine of China and the US - where China is actually filling in and overtaking what would otherwise be moderate durability in demand strength from the US

when you look at say the Great Depression - what you are looking at is a deflationary environment with an initial austerity background (the unintended consequence of the Smoot-Hawley traiff act occurring at the same time as an agricultural production shock) - that gradually came to be moderated by the progressive government policies of FDR's New Deal from 1933 and then the war effort massively growing productivity

so when you analyse future scenarios - you need to ask yourself what kind of environment will it be. Deflationary of inflationary. And will public policy response be austere or progressive - because that in part informs whether it will be deflationary or inflationary.

You also need to be careful not to conflate equity market corrections or long term reset phases with economics.

Sometimes markets de-rate because of economics. Sometimes its because of liquidity. Sometimes its because of valuation.

or it can be a mix.

As for bullion dividends. I think dividend talk for a developer is a tad too advanced.

But I do agree and have long said that a policy like say EVN's current one - married to prudent balance sheet and cashflow management - would have made precious metals miners an institutional investment mainstay 20 years ago

However its an approach suited to a portfolio of projects not typically a single mine company unless perhaps it was a tier one 50 year mine.

Mining is extremely capital intensive and resources/reserves need to be replaced each year - as well as new opportunities for growth invested in.

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Hmmm - a casual slip of the finger deleted the content of my previous post!

Thanks gb. I appreciate you taking the time to reply in great detail and with consideration to the environment historically vs what appears to be happening now.

You're right perhaps it's a bit early to be talking about dividends - maybe I was being over-exuberant.

My main takeaway from the Homestake Mining story was that a well run (profitable) company, great tenements, a tightly held share register and
a willingness to pay dividends is the vision I would like for BML. I see it has the potential to generate long term wealth for shareholders.

We have been flying under the radar in comparison to other PM ASX stocks and consequently this has been an opportunity for further accumulation.
If the silver price does explode in coming months due to any number of drivers: WallStreetBets, dwindling supplies of physical silver, EV revolution, an additional $1.9 trillion US debt or simply FOMO, my fear is that more eyes may turn towards a currently undervalued BML increasing the risk of being a target from other companies.

BML Price at posting: 46.0¢ Sentiment: Buy Disclosure: Held
7 Upvote

0 Great analysis

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