Hi
@flaming
Apologies for delayed reply. I’m mostly not on computer during trading hours (just read on mobile) and hence could not reply earlier in the day.
Despite holding BDR, regrettably, my research on BDR has not been that detailed, and I think several BDR commenters might be far more detailed than me. I have been focusing more on gold macro all year round and have been in and out of most goldies during the year. I’m still holding a small portion of BDR and am happy right now to hold on and see what happens.
I don’t necessarily think it has to be all doom and gloom, and important to note that almost all HC gold commenters have gotten at least some thing wrong over the years on various gold stocks. I remember when BDR was down to 10c some years back (2015-16) and we had similar doomsday talks, and next year, BDR was a 5 bagger and one of the hottest goldies, inspired largely by gold’s mega rise of course.
I’ve just done 1 analysis on gold on HC all year as below last July
https://hotcopper.com.au/threads/gold.2750023/page-33359?post_id=25758021
As I noted there, the setup for gold stocks looked good and we were potentially bottoming. I was right from medium term perspective and gold stocks had its most powerful rise of the year soon after, although it keeps giving back its gains.
I think the setup for gold has looked good all year round for a major breakout but has been consolidating all year long. I’m looking at gold every day and will try to provide an updated analysis around/after next week’s Fed meeting with an update on gold, as a whole.
If gold rises sharply, our dog would likely rise back up again.
Shorts are still not that high and does not look like smart money is betting on BDR going down
https://www.shortman.com.au/stock?q=BDR
Recent 2 major catalysts for fall seem to be cash problem and the low grade ore stockpile adjustment.
Of course cash problems are serious and there is a
potential going concern issue and it could be lights out in that case. It is a risk that BDR investors have to take, and hope that as disclosed in accounts, the Sprott facility goes through (which ideally should) and that BDR manages to rollover bank facilities, manage covenant breach issues, MACA payables etc. Yes, there are risks of course and serious risks at that but the share price already reflects this....hopefully.
If the money from Sprott comes through, it would give us a lot of breathing space and share price could rise very sharply on the same day.
With regards to 100 million loss for the year, most of it is low grade stockpiles write off. So we are not going to have that next year.
In past years, RMS went to 4c in its lows, SLR around 15c, RSG around 20c, NCM around 7$, SBM around 7C, MOY around 2c, RRL around 1$. Few people would have the guts to top up or even hold on then. So, I think it is very important to form one’s own conclusions and decide what one has to do here.
Remember I’m not dismissing the risks and negative analysis (and kudos to those who got it right over the last few months) but I’m just saying that many have been wrong in the past on many goldies at the bottoms.
If BDR survives and gold rises, price would be materially higher. As I mentioned earlier , gold setup has been looking great all year long, ready for a breakout. I’ll try my best to provide a gold update next week if I think a bottoming setup for gold is indeed in, or alternatively will hold on a bit till that setup looks better. I do think however that there is some risk of a final washout in gold prior to a huge rise.
I'd like to see this and next week's action in gold prior to forming conclusions.
Yes there are serious risks with BDR and hopefully, it is all priced into the share price.
I do believe that us gold bugs would probably be best served diversifying our gold holdings as much as possible as the sector is too unpredictable.
Cheers
