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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (13910)	5/14/2004 1:38:23 PM
From: ild	Read Replies (1) \| Respond to of 110194

Date: Fri May 14 2004 12:47 trotsky (@BGO) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved the point with BGO is really that it sits on about 40 million ounces in undeveloped resources, 12 of which are in the once-a-century extremely high grade Kupol find. since it is well known that the majors have trouble replacing mined out ounces, it is logical to expect BGO to sport a significant take-over premium. however, with Refugio coming on-line later this year it's definitely possible that BGO could go it alone, provided the PoG doesn't fall out of bed completely. Cerro Casale according to PDG will cost more than the 1.3 bn. originally envisioned, and BGO's share of the cost overrun would come to about $75 - $85 million. no big deal imo considering that this will be one of the largest gold-copper porphyry open pit mines in the world. but Kupol remains the crown jewel...its only drawback is its location, but then again, BGO has been operating its Julietta mine successfully in said location for quite some time now. note btw. that BGO also has a significant interest in an exciting PGM orebody in Russia that is drilled by its Puma subsidiary. obviously no-one buys BGO for its CURRENT earnings. Petrex has proven to be a millstone, but that is largely a function of the strong Rand. the other side of the coin is that it provides significant leverage once the Rand turns down. due to its 'pie-in-the-sky' character trading in BGO shares is more 'emotional' than in other pm stocks, which is why sentiment indicators work especially well with it. frequently, when its stock has just cratered again, it becomes e.g. the subject of intense debate here, usually of the worried kind. so far, every time that has happened it has embarked on the next up leg shortly thereafter.