BGL - Post from Coach ...
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Hi BT!
Well tonnage estimates would just be off the top of my head, but 3 of the deposits I walked through are in the magnitude of 5 million tons or more each, subject to confirmation by drilling.
The reason that I am confident in speculating such huge tonnages is that the historic workings extend for many hundreds of meters on two of the mines, and they only extracted the highest grade zones, usually only the stuff above 3,000 g/t.
When a mineral deposit is created, it is a random distrubution of grades from barren rock to super high grade enrichment.
You do not just get a defined zone of 3 kilos silver per ton, and then nothing else. So my point is that there must be a massive tonnage remaining alongside all of the ore that has been mined out.
Grades of 600 g/t silver were not of interest to people who were busting the ore out of the ground by hand, and then transporting it by donkey for kilometers over steep broken ground, 100 years ago.
But I can tell you they sure as hell are hugely economic to the current property owners. And just about everywhere I cared to swing a hammer I came up with incredibly rich ore, visible silver throughout.
One other prospect is the top of a hill, which had just a small test-pit dug into the side. Probably the entire top of that hill will be mined as a open pit with a very low strip ration, and then the high grade vein section plunges probably for several hundred meters.
It is almost untouched, and trench sampling has confirmed the grades at various points along the hill. That prospect too is multimillion ounce potential. Do the math, and you can see that BGL will be trading so much higher over the next year as they prove this stuff up. For a hint, some other Mexico juniors that are trading with 10 times the BGL market cap, have less than a million tons of ore proven.
I do hope the company will choose to do a limited drilling program this summer, just to prove on paper that some of the larger open zones are for real. That alone will triple the share price this year. I do not think there are going to be any drilling assays released in the next month or two, but they may release assays on the grab samples we were taking during the trip. Those will blow the doors off, but grab samples as a rule are of only limited value. The issue will be to outline how much you have.
They are working on sourcing equipment right now to start production. I saw about a million tons of ore grade material sitting right at the surface that they can process for a nice profit right away with no drilling whatsoever necessary. That would keep a smaller mill going for 5 years just on its own. But they also need to do so much work first.
They are planning a much larger operation, and everything has to be built with the next step in mind. You cannot just scramble around to grab a bit of ore here and there for a short term cash injection. All of this has to be planned in order to be the most efficient. That is what separates the juniors that go on to be major producers from the rest of the incompetent short term thinking penny stock teams that burn bright for a few years and then disappear.
To illustrate, just consider one little issue: The company has built a small road to access some of the workings the mine. The basically pounded a bulldozer through a hillside, using the barren host rock as road aggregates. The trouble is that rock is hard and jagged. Running heavy machinery through will shred the tires on the trucks very quickly. That means downtime in production, extra operating costs, and they may not even be able to replace the tires quickly due to market shortage. Do you spend a lot of money now to improve the road? Or do you start production and screen off the overburden from a deposit to use as road material, but pay a higer operating cost along the way? And where the hell does the money come from? These are issues that have to be dealt with, and they will define the strength of our management team. You will not read about that kind of thing in an investment report, but you better believe it matters.
I estimate they will not be in production until the end of the summer. The plan is changing as they begin to appreciate just how big this deposit is. They will likely want to make their test mill much bigger capacity to generate more revenue, but that will also cost more upfront.
Make no mistake, these guys are very serious about building a huge company. There will be huge growing pains along the way, but if they can pull it off, there will be a lot of BGL millionaires within 2 years. Just buy the stock quietly and patiently. Do not chase it or bid it right up, as it will take a long time to make the plan into reality and there will be the usual ups and downs along the way. I will be buying a lot more myself, and paying much higher prices for it, but I will report honestly exactly what I was able to see, and I hope as many people as possible will get on board cheaply.
cheers!
COACH247
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