I don't understand the rampant negativity. The company finally got the cash to mine gold. It will not go bankrupt over the next 2.5 years. It may get cash from the gold it produces. It has another potential JV in the works. Experienced people recently signed on.
What has changed today versus last week? Has all the potential gold disappeared overnight? I am actually laughing at all the selling. It is pretty amusing. It shows mass confusion and hysteria. Why did these people buy this stock anyway? Was it a personal ponzi scheme they hoped to cash in on?
Logically, why would anyone invest a minimum of $9 million over 2.5 years if they would not get some kind of return? Sterling mining has 6 million warrants at $0.30. That means for them to break-even on their investment of $9 million, the stock has to be trading at $1.50. For them to make a 30% ROE, the stock must be at $1.95.
If Sterling Mining invests $15 million, BCMD stock must be at $2.50 for Sterling to break even. To gain 30% return on equity the stock must be $3.25.
This doesn't take in account dilution from the warrants. Add a few cents more to the above stock prices to take in account dilution.
This could all be mental fluff, but it tells me, in my inexperienced opinion, one thing. That Sterling Mining is covering its ass, expecting a minimum stock price of $1.50 before it sells its warrants. That suggests a lot of potential upside over the next 2.5+ years.
We have gold production figures on the horizon, and another potential vote of confidence by Sterling in February 1998. Basically, BCMD has two months two prove itself to Sterling before it will invest more money? Why are you all running away? The next two-three months are going to be very exciting and a lot of fun to be a part of.
Go ahead, please sell more. Bring BCMD down to under $1.00 and I will suck down those shares like a Friendly's Fribble. Yum.
So, I've been investing in gold stocks for less than four weeks. Someone more experienced tell me how I am wrong.
Schopenhauer |
