Previously updating on Bluebird Merchant Ventures (BMV) - in which we own shares - we’ve noted confidence that funding to take it to gold production would be concluded… and now an update including that the company “is pleased to report that the South Korean company has successfully completed its due diligence and has advanced to the point at which financing terms will be confirmed shortly”...
This is potentially very positive as it is non-dilutive funding - “a path to provide US$5,000,000 of debt finance that will be repaid from future gold production” - and enabling “initial mining commencing in 6 months and gold production some 3 months later”. That is with the financing expected to be received by the end of July, though it is still noted that there can currently be no guarantee of a successful conclusion. However, this is a clear further step towards that – and the shares have nudged higher above 4p, to capitalise the company at £15.5 million, in response.
The 50/50 joint venture is looking to “over a 3 year period gold production will largely grow organically from 10,000 to 30,000 ounces per annum. A further USD 7 million of capital will be injected during this period, however the bulk of this will be contributed from cash flow from production… Based on both mines over the initial 3 years of production… the estimated average cash cost per ounce (C1 level) is USD 576 per ounce”. This is also with “both mines will continue to expand their mining area and build up inventory whilst the process plant design is completed and constructed”.
With gold currently above $1,700 per ounce and even a $1,000 per ounce margin on even 5,000 ounces (remember it should build initially to three times that) equating to $5 million (currently just over £4 million), we continue to see clear massive further upside potential on financial and mine deliveries. There seems to be a small stock overhang, as Tom mentions HERE, but that should soon clear as financing is confirmed. We now target an increased 6.5p to sell in the very near-term. At around 4p and at up to 4.5p, our stance remains buy.
This article first appeared on HotStockRockets - to catch the next red hot share tip from the HotStockRockets team TOMORROW and also one that went out just before last weekend for just £5.50 click HERE
Filed under: Bluebird Merchant Ventures, Bidstack, i-nexus, Attis Oil & Gas, All Active Asset Management
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