BGS 2.86% 17.0¢ birimian limited

Speculative Valuation Projection

  1. 3,378 Posts.
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    What is apparent at BGS (from quarterly and PPP) is that the Company is on the cusp of defining major volumes of gold resources at Viper, Koting and completing JORC assessment at Ntiola, and has around 20 prospects for additional evaluation (within Massigui) within 25-30kms of the Morila process plant.

    BGS is promoting itself as the potential developer of a "multi million ounce" gold resources at Massigui. On a conceptual basis we are looking at minimum production rate of 150,000 - 150,000 ounces per year if minimum targets are met and 150,000 - 300,000 ounces if we hit the higher end of our conceptual range. It is quite possible that BGS will define a number of separate open pittable resources that will progressively feed into the higher output number.

    Morila ran at a loss in the last September quarter (cash cost US$1,489 oz) as it is treating lower grade material, and cutting back the walls of the exhausted open pit to keep local miners fully employed. In 2013 Morila ran grades of 1.5 g/t au at a cash cost of US$745 oz.

    Morila needs lots of high grade gold feed AND it now appears very likely that Massigui has the potential to commence fulfillment of that need.

    At a cash cost of US$745 and operating at a grade of 1.5 g/t Massigui can produce "free cash flow" of US$50.5 - $75.75M at a rate of 100 - 150,000 ounces, and US$151.5M at 300,000 ounces at a rate of 300,000 ounces. at a US$1,250 per ounce gold price. At higher grades and higher US$ pricing the free cash flow goes off the chart i.e at US$1,400 per ounce production of 200,000 ounce returns US$131M / A$163.75M at 1.5 g/t au.

    That places a ballpark valuation of A$05 - A$1.0 Billion on Massigui if drilling continues along its current bullish pathway.

    BGS does not need to get into producing expensive and lengthy PFS and BFS studies as they will not have to finance a plant or sell forward gold. All they need to accomplish is completion of drilling programs and JORC definition followed by brief technical / metallurgical and environmental, studies and permitting to support suggested output rates (from very shallow and low cost resources). IMHO timeline is 6-12 months for first shipment of initial ore. Ntiola will probably be the first open pittable ore producer as most of the technical stuff is already completed.

    At $0.015 / market cap A$13M we are looking at some very significant blue sky ahead especially if the gold price continues to rocket like it did to-day. Good luck to all longs
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Mkt cap ! $44.96M
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