Since you're the only one that asked you're the only one I will tell, lol.
First off let me say that I think BGM.V (BGMZF.pk) is very undervalued compared to its peers and although it's been showing good strength lately I think it has a lot of upside.
However I am buying my exposure to BGM by buying shares in Golden Cariboo Resources GCC.H.V
Based on my own research:
Golden Cariboo Resources: GCC.H.V
Shares outstanding: 7,085,969
Management/Insiders own: 1,992,500 shares or 28.1%
The company has no business or resource project. It's only asset is shares in Barkerville Gold having received these shares from the sale of various mining assets to BGM.
Here is the interesting part......
As per their latest financial statement ending December 31 the company owned 1,519,047 shares of BGM
On April 9 2011, the company was to receive another $450,000 worth of BGM. The closing price at that date was $1.60 therefore based on that price the company should have received another 281,250 shares of BGM resulting in a total of 1,800,300 shares.
As of December 31 2010 the company's balance sheet showed total liabilities of approximately $1,000,000, of which approximately $330,000 was owed to a company run by the CEO.
Taking today's closing price of BGM of $2.05 I have concluded that.......
1,800,300 shares X $2.05 = $3,690,615
subtracting the total outstanding liabilities of $1,000,000
$3,690,615 - $1,000,000 = $2,690,615
$2,690,615 / 7,085,969 shares
= $0.3797 per share
GCC.H closing price 5/26/2011: $0.25
So by my calculations it is trading at a 34% discount to the value of it's BGM shares. Or you can say buying a share of GCC.H is like buying BGM at a 34% discount. $2.05 - 34% = $1.35
Add the fact that the CEO of GCC is the same CEO as BGM and that he has been a continous buyer of GCC.
Every $0.04 increase in BGM shares = a $0.01 move in GCC.H
In my view GCC.H is a gimme.... a lay up..... a no-brainer.... especially if you think BGM is going higher. The challenge is to try and get sufficient shares as the deal is very tight.
I bought more today. |
