BMN 0.00% 3.7¢ bannerman resources limited

my take

  1. 45 Posts.
    Wow...a big couple of weeks that was carnage for bmn and not a great time to be away on holiday. During that time have spoken with management brokers and investors and this is my take on where things are:

    - management made a big mistake on presentation of pfs results that they have been trying to recover
    - op ex clearly higher than market and myself was expecting (US$35 was formal guidance although market was closer to US$30 with expectation of floatation benefits)
    - market has penalised heavily bmn for this and could have been much more limited if explained this did not include benefits of higher grades from northern section of deposit and full benefits from floatation
    - capex was good particularly given depreciation in usd
    - mining timetable was fine but market disappointed by dfs timeframe
    - management now on front foot although a lot of damage done. there is a 2 week roadshow in europe and US planned starting on 11 Jan
    - industry participants and utilities liked release of pfs but not shared by market and reaction made worse by retail register structure
    - we have seen good buying out of Canada with Credit Suisse buying circa 7m shares over last week or so. have also seen some smaller aust insto holdings exit via Euroz

    Where does this leave bmn?
    - no question it has a world class deposit and has to get it back on track via resource upgrade and op ex reductions in Q1 disclosed to market,
    - from industry sources bmn is a marked company that will force them into a strategic tie-up in Q1 (this is earlier than expected but given industry interest is nothing for pounds pa that can be produced (EXT the queen of U companies and a fantastic resource has struggled to attract big end interest due to valuation concerns - this shows it is not always as easier as it appears)
    - i believe bmn deserved a sell-off given how it delivered results. yes the market over shot but that is how life works.

    There is a lot of interest in the company and the time frame for a strategic event has shortened.

    The challenge for management is to move the share price north pre a corporate event. I want a 50%+ premium to $1+ not 70c.
    Am i disappointed - yes, but reality is this could all move very quickly to an end game.

    I have not intention of selling at these levels. I honestly believe i will not receive anything like true value as this could end quickly although at a significant premium to current levels. This might not be want long term holders want to hear but bmn is a wounded animal with limited defenses right now to an aggressive predator.....the question is can bmn do a deal quickly to materially lift share price before it is attacked?
 
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