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BGS 32.0¢

Massive Upside Peer Group Comparison

  1. sydneysider

    3,362 Posts.
    BGS follows in the footsteps of Hummingbird Resources (AIM listed) which is capitalised at A$61.4M (BGS is at A$13M) both are supported by Sprott and Rick Rule. Hummingbird has completed technical studies and funding for Yandofila in Mali which hosts 20.1Mt at 2.8 g/t au (SS has estimated that BGS Massigui is already around 17Mt with conceptual triple / quadruple upside which would make it a monster gold resource).

    Yandofila has cash costs of US$503 and ASIC of US$700 per ounce of gold, and is typical of operating costs in Liberia and Mali, Australian operators are closer to ASIC of US$1,200 per ounce, and rely on a collapsing A$ to survive. Yandofila has an IRR of 53% at US$1,250, and BGS will generate MUCH BETTER returns if it utilizes existing plant at Morila. IMHO this is now a very serious possibility with results of recent drilling indicating BGS is sitting on multi million (potential) ounce gold deposits at Massigui.

    Average Market Cap per ounce of defined resources in West Africa (for merging producers) is US$47 per ounce. IMHO BGS has conceptual potential to fall into a 2-4 ounce gold resource range within the next 12 months, and attract a valuation of 2M-4M x US$47 = US$94M - US$188M at US$1,250 per ounce gold price or A$117.5M - A$235M / share price of A$0.15 - A$0.31 per share. Confirmation of a JV with Morila should also double this valuation PLUS any increase to the current gold price (above US$1,250 per ounce) not factored in, as the IRR will go through the roof!!!

    BEFORE we advance exploration on the Liberian project that abuts Hummingbird Resources Dugbe shear project of 4.3M ounces of gold. BGS has a very high potential 15km long artisanal gold camp project that is being trenched and surface sampled at the moment, and is next to this massive Hummingbird resource, and lies between the Dugbe and Dube shear zones.

    IMHO BGS represents one of the most exciting conceptual upside gold plays listed on the ASX at the moment. Good luck to all longs. Hummingbird Resources is 50% owned by major gold investor institutions, and the same will happen to BGS where we only have Sprott with 14%. Good luck to all longs

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