Opinions
Brent Cook
Belo Sun Mining
BSX-T
DON'T BUY
Jun 26, 2015
Stock price when the opinion was issued
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The Volta Grande project had a feasibility study done last year. Agnico- Eagle (AEM-T) put in $15 million to go through the permitting cycle. Doesn’t know how long it will take in permitting. This project also has substantial exploration potential. At current gold prices, that asset is worth putting into production. Expects this company will be absorbed in the not too distant future.
They want to build a mine in Brazil, but there are some environmental controversies. They have the Volte Grande project which is over 6.1 million ounces in all categories, and a grade over a gram a ton. In early years, they can have higher grades, so you get a really robust payback. From a technical perspective, everything is great.
An explorer/developer. It certainly hasn’t performed the same as Continental Gold. Has shown more volatility. Brazil obviously can be a difficult environment. He thinks they are appealing an injunction on their deposit. In South America, the social license is very difficult, and he thinks that is the overhang with the stock. He has avoided this.
They have some issues with locals. They re-submitted an indigenous document and so we have to see what happens. It is a leveraged play in the Amazon.
A large gold deposit in Brazil. Have redone the feasibility study, so it is a much smaller staged project. It has an $80 million market cap and will need to raise in excess of $300 million. That is the issue they are going to face. This is something that a major could buy. What they need to deal with right now is getting their final construction permit, which has been a hassle all along. Until they get it, he wouldn’t buy this.