OK
@Heloise had a good look at BSX as I have decided to INCREASE my holdings.
All from the top of my head, here goes.........
First, the RISING nickel price that is in our favour. If we understand the historical growth of new industrialised economies, what we notice is at first the economy is built on infrastructure, so in the first part the demand for the basic ingredients is strong. Coal, iron ore for steel-making, cement for roads and quarries for buildings and so forth. The next stage is the wealth building stage where the demand increases for the base metals. All those new roads and railways now need cars and trains, as well as the population needing their mod-cons. So, we see nickel rising with gold, silver copper, zinc, lead and so on. This gives us confidence that it is demand growth, as if nickel rose by itself it would suggest supply issues with nickel only. So we have confidence in a rising nickel price as the chart shows. This gives us greater confidence in BSX.
BSX has acquired a complete plant that was on care and maintainence since the downturn in the nickel price. This would normally be a red flag, as it indicates the venture was marginal at best. But in this case it looks as though a rising nickel price will bring this through as BSX are now finding more, much more nickel and a small high grade component to support the plants re-start. Also as they point out in one of their presso's the cost of electricity, the labour costs, and the increased rebat they are likely to achieve on their royalties if they build in downstream processing. Vietnam, like a lot of these Asian economies are hungry for growth and have policies to assist. That helps BSX.
But the really good news is alongside their growing reserves is that they have just uncovered a gossan, the top of a possible new area. in Australia, gossans are treated like flashing lights atop of any possible deposits, saying, hey! look here, see what I'm hiding. The really good part of this is that it informs us that the previous owners did not look hard enough, did not drill enough to unlock the full potential, instead leaving it for BSX to do so.
As it is, you can think of the deposit like this. pretend to hold your hand up, fingers stretched ready to catch a ball. your fingernails could represent a gossan, and you outstretched fingers the vein deposits they are now finding. lot's of them. But the exciting, or nail-biting part, is that if you look at your hand, the fingers are attached to you bulky hand which is attached to your forearm. That's what they are now doing with the deep drilling, they are trying to follow, vector as they call it, a path back to the core (represented by your hand) Find this, and if it mineralised enough, big enough, and not excessively deep, then we will see fireworks with the share price as nothing excites investors as much as a good nickel discovery. (the giant Kambalda discovery by WMC back in 1966, led to the famous, or infamous, Posiedon nickel run)
Any way as the chart shows, we have a confident group of investors....(as evidenced by the stable share price appreciation) who should enjoy a continuation of more of the same, but with the possibility of spectacular boom if they un-earth the core of the system.
Doesn't get any better.
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(20min delay)