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Gold/Mining/Energy : BLACK HAWK (TSE:BHK)
BHK 9.560-0.9%Nov 14 4:00 PM EST
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To: EZbeliever who wrote (358)1/12/2000 4:07:00 PM
From: baystock  Read Replies (3) of 545
 
EZbeliever,

I looked at this company before when it was in the teens and decided against it. And since then I have noticed they have taken on a significant hedge postition. This is not good at all. If the POG goes down or stays the same this company will not do any better than it is now. If the POG explodes up in price they may go under because of their hedge position. So overall not a very attractive risk reward position.

I would think DROOY would be a much more attractive risk/reward situation. Almost no downside from current prices of around $1.50/share and significant upside if POG ever gets going. They are currently producing 1.2 million oz at $265 cash cost. But I think with their potential new Australian acquisitions and their recent Harties acquistion they are headed towards becoming a 1.5 million oz producer with a possible average cash cost below $230. This will be with around 100 million shares outstanding. So for $150 million market cap you will get a profitable, debt free, 1.5 million oz producer in 12 months timeframe. IMO DROOY has as good upside leverage as any of the Canadian juniors but with out much downside risk at all. Plus it is much more liquid with only a 1/32 spread most of the time, if you want to trade it.

Ram
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