Despite a positive view of the Bolivia project from Coeur which I posted yesterday, I am trying to work out where the value is in Coeur if this project runs into difficulties.
This appears to be a gamble, NOT an investment.
I'm really at a loss to understand why BSG cannot simply get on with the job, bring Palmajero into production, (maybe merge with Palmajero Silver to simplify the corporate structure) pay dividends to shareholders out of the substantial profits and upgrade resources through more exploration.
Silver is in a bull market. The odds are that it will go much, much higher which will have multiplying effects on the worth of BSG.
With anticipated production costs of about US$1.00/oz silver after gold credits BSG DOES NOT NEED to give up this valuable resource to any company that has inferior resources via a merger or takeover.
The fact that other potential suitors' share prices have risen is not a reason to merge with Coeuer. The fact that Coeuer's share price appears cheap is not a reason to "buy" Couer shares with BSG scrip.
There are clear reasons why the Coeur share price is sinking. It hit a new 12 months low on Friday.
A question that needs to be answered is:
What is Coeur worth should Coeur be prevented from bringing their Alaskan gold mine into production and lose their Bolivian project?
BSG Price at posting:
0.0¢ Sentiment: None Disclosure: Held
