I have thought for the last few years that gold would get
substantially above $400/oz; through demand, coupled with inflation.
That has not happened. I believe BMG results, are by and large a
function of gold price. Simply put if mining an once is $200, and
the cost of gold goes up $50, the increase in the gold price goes
right to the bottom line. With gold averaging approx. $350, I don't
think we can expect a good quarter.
The listen only conference is a great opportunity for the small
investor to get a feel for the sentiment of the officers. But be
aware that they will likely put a positive spin on things, so
sometimes you have to read between the lines.
In general BMG has done well with the acquisitions, increasing their
gold reserves. I would expect, if gold stays down, there will be
additional consolidation. I don't believe BMG, can do large all cash
deals, so they will have to do stock deals, which is less attractive.
If your believe gold prices will go up, BMG is an excellent
investment and you should buy more. I think BMG cannot go much lower,
the downside is limited. My own opinion is that BMG will stay in
a trading range 6-7 until we get a move in gold, toward $400. |
