Mmm I don't understand this properly enough, but I'm thinking good idea if the explorers are generating sufficient revenue, which many don't, so given that premise, then no, not a good idea. Holding equity in anything is only good if it's a cash generating machine.
Back to BLY, although they've made a mockery of things, it's worth a punt at these levels based on the following:
- Since 1 Sep 2017, total ASX volume is 3.8B. Quickly totalled via Amibroker. So big holders like Ares are slowly starting to run dry. This does not include Chi-X volume. So real vol is more like 5 or 6B.
- Their products division revenue is increasing, and if I remember the report correctly, the margins are improving as well. Their research and development investment is starting to pay off now.
- The re-domiciliation to Canada indicates at least some sort if cost saving initiatives are happening.
- I'm fairly bullish on commodities, the media are negative as always but more exploration is happening. Rampant technology advancements need materials. Copper is always needed and probably more so going forward. And as for gold, well I think it can surprise, it will always have the anti-fiat bulls behind it and humans have wanted it for 5000 years so it ain't going anywhere despite the US dollar bulls.
Stable or rising commodities = BLY worth over 0.8c in future.
BLY Price at posting:
0.8¢ Sentiment: Buy Disclosure: Held
