This is analysis that made sense to me (from a site called gold silver data), and which explained the risk-reward fairly well with this stock:
Summary (from last analysis - 05/17/2014)
Banro Corp is a growing mid-tier producer. Other than political risk (Democratic Republic of Congo) and debt issues, this stock is a slam dunk 5 to 10 bagger. They have an incredible amount of gold (possibly 20 million oz) and production just began in 2011. Thus, this company is going to be growing rapidly over the next 5 years. By 2018 they should have 4 producing mines and 350,000 to 400,000 oz of production.
Also, they have project on top of project to explore (500,000 acres), and the mineralization is 1 to 2 gpt surface mining, which is very low cost in Africa. This company has the potential to a major, with a market cap over $3 billion. I could be wrong that they will reach that lofty valuation, but if gold goes over $2500 and they hit their production target of 500,000 oz, this will be a very valuable company.
The biggest red flag besides the location is their balance sheet ($175 million in debt and only $4 million in cash). If they ever have to stop mining, the stock price is going to crash because of their debt burden. This might be a good speculation stock. If gold prices spike this year, they could improve their balance sheet and jump in value. With a FD market cap of only $120 million, their future reserves are selling for about $12 per oz.
As importantly, the courts just ruled in favor of Belo Monte and are preventing the dam from being suspended, etc. They are also calling into question the accuracy of the documents, used as proof by opposition, that the indigenous people will not be able to live their traditional way of life with the dam (particularly as FUNAI was well-involved in the plans to build this revised version of the Belo Monte dam). This news was published in the Friday papers, as well as the Belo Monte blog. The judge asked that a study be done which scientifically proves that the indigenous lives will be adversely affected.
Again, then, congrats. The product definitely has a loyal customer base, and their franchising plans hopefully goes forward as initially planned.
Congrats. But given that Fischer Investments is the primary buyer, it means the temporary "bankruptcy" was also intentional -- so the Scott Fischer guy remains crooked in my book. As do their insider buys at .0001 cents a few months back. As does his temporary hiring, then quitting, of his board position. etc.
Anyway, happy to have the cupcakes back (I missed them immediately, and tried to buy them on Monday when I thought they may be selling inventory at reduced prices) and happy some here got wealthy from their investments. I took a 25 percent loss, which could have been more.
The Invecture website now states it "also owns the Los Cardones Gold Project in Baja California Sur with a reserve of 1.2 million ounces". Prior to this, it used to say it entered into an agreement with Vista to buy the project... In other words, it appears the 2nd payment may have been made (or at least will be made very shortly).
As for the Midas shares, they did recently have permits revoked for some public properties, yet to be drilled, but this has no bearing on the properties that already have been drilled and which make up its 1 billion NPV (at $1400 gold).
Rockstone upped its projection to $4.20, thinking the drill results suggest 3 to 4 million ounces. If only every gold miner I held was covered by Rockstone...
headline is titled "Sun Valley Gold loads up on shares of Belo Sun Mining", and was released 6-19-2014
For those who have been working long irregular and full of risks posed by mining, so the opportunity to transform the quality of life here. "For me there is no possibility of returning to the camp. Before the project, what we thought was that it would stop because many accidents happen, "said Milton Reis, today auxiliary field in the mining company.
"The training center is a tool to leverage the region's development and enable the improvement of the quality of life in communities, especially the employment opportunities and income to be generated," said Claudio Lyra, general manager of Belo Sun The curriculum was conceived after diagnosis that identified characteristics of the region, such as informal work, absence of public policies of the state, low education and the yearning of the people by promoting citizenship.
The Sebrae consultant, Taciane Fanchiotti, stressed that training workshops for owners of small businesses will be held. "They know how to work, manage, buy and sell. Sebrae work to foster competitiveness and entrepreneurship, "he said. "The first step is to empower the community with courses in baking, sewing, mason, electrician, blacksmith and owner motorcycle mechanic," said João Vieira, director of the entity in Altamira.
"It is very interesting how we are partners in an embryonic project, but gain body and become a venture opportunities," said Amorim Euripedes, technical advisor of Networks. "It's a partnership that has to stay, because it is very development of region and, of course, the population has to be benefited from it ", said Vanessa Anabelle, deputy mayor of Senador Jose Porfirio. courses One of the program will be promoted through technical agreement signed with the Sennar. formation literacy is planned who will be working in communities in order to reduce the rates of illiteracy. According to Belo Sun, 80% of residents are illiterate
The residents of communities in the south of the municipality of Senador Jose Porfirio, in southwestern Pará, gained a new opportunity in the pursuit of improving the quality of life. The Belo Sun Mining company responsible for the Volta Grande Project, gold mining in the area, opened on 29 May, its Training Center. On site will be offered about 1,400 vacancies in more than 30 courses for professional qualification of residents surrounding the mining venture: Vila Surf, Island Farm Rooster Itata and Possum. The Belo Sun is a Canadian group linked to Forbes & Manhattan company.
The courses are scheduled to begin this month, part of the Education and Training Program (also released by Belo Sun on the morning of the 29th of last month) will be implemented in partnership with the Federation of Industries of Pará (Fiepa) / Network Supplier Development Pará (Networks), Support Service for Micro and Small Enterprises (Sebrae), National Industrial Apprenticeship Service (SENAI) and the Federation of Agriculture and Livestock of Pará (FAEPA) / National Rural Apprenticeship Service (Sennar). Will be invested £ 1.5 million in the program, value formalized in March after signing a cooperation agreement between the miner and the institutions involved.
For stay-at-home Franciele Santiago, this is a chance to qualify. "This is a difficult and far from the city area. One would like this opportunity if I were living in the city. " Her opinion is the same university Maria Soares, who lives 23 years ago in the Village Surf. "I intend to do all the courses that appear after all to have a good job have to study and qualification", said the lady of 44 years. "Even my daughter ten years wants to make social inclusion," he joked.
Belo Sun waited until May to mention in a press release that they received the preliminary license -- which they got back in February. Coupled with their failure to mention the building of their training school in a press release, and I have just guessed that there may have been interest among major investors (including insiders, etc) to keep prices low awhile.
As for GDXJ tomorrow, I wonder what would happen if Belo Sun was able to rise above 75 million market cap on another great day of trading. If so, would Van Eck keep them in the ETF? Should Van ECK dump them, really hope that Bharti, Eaton, or one of the investment companies (Canaccord?) buy up the shares in one swoop.
As Belo Sun investor, sure wish they used inferred resources in their PEA too. Congrats to you, the Kaminak explorers are among the best...
If you buy via the US, always know the BID/ASK price on the TSX, then do the calculation (.91 times price) before putting in an order.
Michael Hoffmann is/was the mining engineer who designed the mine for the PEA. It was criticized by Rick Rule, etc, when the design was originally made public in May 2013, and perhaps an upcoming press release (of which Belo SUn offers few) will mention he has left the company. If he didn't, then maybe he thinks the GDXJ reindexing event (on June 13, when companies under 75 million market cap are supposedly removed by Van Eck from its fund) was possibly going to hurt the stock a little more. Or maybe something else...
From what I read, all the news related to Belo Sun and Belo Monte has been good lately, with Belo Monte now making major advancements in its building of the dam (and it's completed almost 50 percent of its civil works).
At the end of May, Belo SUn completed the building of its training school for locals (it made favorable news in the Brazil papers, not here), and official classes start in June sometime. So Belo Sun is nearly complete its civil works too -- which was a pre-condition for its final permits, btw.
When its definitive feasability gets released, it's likely the mineable resources will be double that which was in the PEA, so there's potential for much higher IRR and proft margins... I will likely be holding a large portion until it gets acquired
Cohenjoe, am curious what made you conclude that 23 cents marked the bottom yesterday. I called bottoms multiple times before, none of which actually were the bottom. So far, it's done okay since dropping to 23 cents the other day.
Asking because there have been multiple articles that they will be out of funds by end of June -- which suggests that a sale of the company, or a financing, are absolutely essential short-term necessities for this stock.
Dam is 50 percent complete. Searches by "belo monte blog" and "orm para newspaper" should keep you updated on the local politics, if interested.