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mystikal

1,692 Posts.

826

03/08/17

12:40

Post #: 26265126
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Originally posted by jakers ↑

This is the kind of thinking I have been seeing on the BGS forum over the past couple of weeks, short term trading mentality where everyone seems to want to buy on open and expects the SP to bubble/rocket upwards etc.

Reality is, until the PFS is released we can only guess what the true value of this operation can be. Even then we still need to secure funding. I already have a sizeable amount in BGS (~40k at 22.5c) and a high opening price would be fantastic, but I suspect after the first week there will be a lot of sellers cashing in. After the PFS news is absorbed, I also suspect a sell off depending on how big the hype got. BGS is still a long way from production and although I agree that current MC is very low, almost every other lithium company moving to production is also undervalued. Yes you can compare our 43m MC until the sun comes down, but at .40c that becomes 80m MC. Pre PFS that is assuming a lot imo, which is fine, but there is an element of speculation there that doesn't seem to be accounted for on this forum.

The recent report was pleasing, and maybe i'm just too conservative but a bird in the hand really is worth two in the bush. A lot of people calling 80-300mt of resource size...but until we get the JORC updated, it is currently 33mt. The new rail upgrades will be fantastic but they are still a long time away. No funding, and looking at some of the debt agreements for PLS and AJM (12% and 15% p.a respectively) I think this is a big question mark. AJM is worth about 200mil, but they are much closer to production AND have great costing economics.

I am personally buying if it is in the 20s re-open, but I expect it to open >30c. If it does, I am waiting until both BGS and KDR produce their PFS's so I can evaluate their potential properly. As mentioned elsewhere on BGS threads, KDR is worth 200mil for 50% of a 100mt project. They are considering a hydroxide plant as well, but they seem to be fully funded to production at this point. I think they are probably the closest company to compare BGS with based on mining progress and long term goals. Saying BGS is worth 200mil at this point is jumping the gun imo. Need to see updated costs & NPV estimates for both. Scoping study is not enough. Huge resource is not necessarily enough either - project looks good but we need confirmation on these issues before moving forward.

Long term I see BGS possibly at 400m market cap. Whether that means 50% dilution or not is not certain at this point.

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I completely agree with this, I am into BGS quite substantially but i would be lying if i said that this will be 40+ on open.

If it did, then great... expecting low 30s at most anything else is a bonus. Just keep in mind that its been a mixed bag or announcments, some people wanna buy in coz they see value and some people wanna get out coz they see value elsewhere but their capital has been stuck.

Right now the only cold hard facts are that we have a resource at 33 mt for lithium and have the "potential" to increase with auger drilling.

The gold deal with Randgold is good.

BGS Price at posting: 22.5¢ Sentiment: Buy Disclosure: Held
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