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There are plenty of companies that have mines and are developing new mines in Russia, including Kinross. Again, I'm not saying that the interest isn't worth the $4 million they paid for it and perhaps it will turn out to make us all rich, but at this point I think it is absolutely impossible to say.
Thanks for the info. There is no evidence I can see that Freeport thinks the project is worth investing in at this point. If IGR badly needed money to fund some additional drilling, why wouldn't they haven't provided the funds and bought back some of IGR's earned interest? I just think it's a little premature to be saying that the discovery is one of the largest and best new discoveries in the world. With all do respect to EMXX's management (which I think are great), Freeport's management isn't a bunch of novices either.
I've been looking around the internet to see what I can find out about the Russian deposit and there is very little. Not a word from Freeport McMoran. If Freeport thought there was something significant, why hasn't it put any money into the deal? This is very early stage and far, far to soon to be suggesting that an interest EMX purchased for $4 million in September is now worth more than the entire market cap of the company. Really? Seems like a little bit of a jump. Keep it real.
Haven't see a PR (very odd). Just got the royalty info from the Sedar link. Looks like they are spending a lot of cash on the Koonenberry project in Australia (good news) as I think that area holds one of the best prospects for the company if they can find the source of all those big nuggets. The BULM royalty should help with cash flow moving forward as they seem to be burning through it at a pretty good clip.
Gross royalty from Leeville during the quarter was only $552k, but that would only have been payments received after the BULM acquisition was final as of August 17, 2012. Unless there are problems at the mine, royalties should be similar to last year, or over $6 million. Gold stocks are generally getting beaten up despite high gold prices. When will the tide turn?
Thanks for the analysis. After reading this article on exploration in Haiti, I am starting to think you are right and my pessimistic attitude needs some adjustment. I still own half my BULM shares and am considering buying more on dips. I sure wish the company would give us an update on what is going on with the merger. The silence is making me nervous like they have hit a snag or something. I am curious how they plan on working out the NEM litigation.
http://finance.yahoo.com/news/prospectors-ready-tap-haitis-buried-192529372.html
I guess I should have said that I am convinced that BULM is not getting fair value for its assets in the merger and could have realized a greater value by itself quicker than being tied to EMXX. I think that management sold out because they were getting tired not because they were convinced this was the best deal for them. They are selling the company essentially for a present value of the NEM royalty and nothing else. All of the other assets which held great promise are being valued at next too nothing. Don't get me wrong, I think its a great deal for EMXX, and EMXX has potential, but that potential is a long term story and frankly I think there are other juniors/explorers who are currently trading at bargain basement prices that represent a better opportunity for my money. In order for EMXX to hit it big they need to get serious with either Haiti or Austriala and neither seems to be making any significant progress. JMHO. Welcome all thoughts.
Don't they need to announce a special shareholder's meeting to vote to approve the merger? The silence is concerning. It should not be taking this long. I sold about 1/2 my shares a couple of weeks ago for $1.08. I'm not convinced that the Eurasian deal is so great.
Does anyone have an update on the merger?
From Newmont's Q4 and 2011 earnings presentation. NEM increased its reserves by almost 6 million ounces of gold. Its chart showed that more than 1/2 of that increase (@3 million ounces) came from North America and that the: "Biggest gold reserve increases came from North America (Carlin, Phoenix, and Turf/Leeville) and Africa (Ahafo open pits)".
The Leeville/Turf mine is turning out to be an absolute world class mine and BULM/EMXX has a 1% GSR. In my opinion, BULM management sold out too early and for much too cheap. I have a lot of respect for them, but I think they were getting tired/looking for a retirement plan, and the deal with EMXX worked. If I were NEM, I would buy out the royalty, especially in light of what they know about the performance and reserves at the mine.
Absolutely. Buying BULM stock is like buying EMXX for a 10% discount plus a divident of $.11 per share.
The market likes the deal! Given a day to reflect and investigate BULM, the market is seeing what most of us have seen for a long time -- BULM is a nice little cash cow. Eurasian Minerals is trading higher both in Canada and the US. The market should also realize the NEM will be more interested in EMXX than ever and it increases the chances of a Newmont acquisition down the road. The more I see and learn about EMXX, the more I like. If gold maintains it current price range, EMXX could be over +$3.00 by the time the deal is ready to close, that would value deal for BULM shareholders at closer to $1.46.
Clearly the link between EMXX, BULM and NEM is high. NEM already owns 9% of EMXX and in addition will be paying $6 to 10 million per year to EMXX on the 1% Carlin royalty. EMXX and NEM also have a JV in Haiti. Sure sounds like Eurasian Minerals would be an attractive target for NEM.
The value of this deal is $1.28 per share. Why would you sell for a 15% discount?
DON'T SELL NOW!
First, the value of this stock plus cash deal is at least $1.28, so it doesn't make sense to sell below that. It will take a couple of days to equalize.
Second, EMXX has a strong relationship with Newmont, which owns 9% of the company and has a JV in Haiti.
Third, BULM is only valued at $48 million which is approximately the value of the NEW royalty. Others will likely come knocking once they realize management is willing to sell.
Weird action this morning. A sale at .62 and .84 and then the biggest spread between the bid and ask for a number of months. Either the MM is playing games or the selling pressure is drying up. We just need a few new buyers. It looks ready to run.
YOU ARE CRAZY to short an OTC stock like BULM -- NO DEBT, ZERO COST INCOME stream, no dilution, and good pipeline of projects. Chances of it going to $1.50 overnight are about as good as going to $.50. The risk FAR outweighs the potential reward. If you are seriously advocating taking a short position, you are full of it.
Whow knows why people decide to sell their shares at odd times into a vacuum. Probably some old timer died and his estate dumped 80,000 shares on the market. Who would rather have $.69 a share than the huge upside potential BULM represents?
I agree with the comment except the Bingham mine is about 10 miles away from BULM patented mining claims in the Oquirrh mountains.
I understand that for years, the old Bullion essentially gave shares away in exchange for services etc. They didn't have any money and were trying to keep the ship afloat. That was part of the reasoning for ditching the old Bullion company and starting with a new one, and they were able to shed some of those shares that way (good for current shareholders). However, there are still millions of shares out there that were acquired for almost nothing. I suspect that there are a couple of those shareholders who have several hundred thousand shares who are systematically selling, trying not to depress the stock too much. Hopefully those shareholders will exhaust their supply and we can get back to a more reasonable valuation soon. In the meantime, if you have money and patience to spare, stock up.
$.20 to .30 per share (depending on the price of gold) is the ANNUAL revenue BULM would generate if it immediately stopped spending money on other projects (i.e. Enshale - Dourave). That is somewhere between 4,880 and 7,300 FREE ounces of gold per year. That is like NEWMONT backing the truck up the BULM offices in St. George and unloading 300 to 450 pounds of gold every year. The cost of producing this revenue to BULM is ZERO. If BULM did absolutely nothing to develop any other properties, a reasonable P/E ratio of 7x $.20 earnings would put the share value at $1.40. 10x earnings of $.30 would be $3.00. Thus, the market is essentially applying a negative value to Enshale and Dourave and giving zero value to all of its other assets. The only conclusion I can reach from this is that management is terrible and actually providing a negative value to their shareholders by pursuing worthless projects, OR the market is substantially undervaluing BULM and its prospects. You choose.
Another company in Utah trying crack the oil shale nut is Red Leaf Resources. It is a private company and has some interesting info on their website that is applicable to Enshale. Red Leaf has drawn the backing of some fairly significant private investors and has invested WAY more than Enshale, but as far as I can tell is no closer than Enshale to making it work on a commercial scale. In fact, if I am comparing the two processes, I think Enshale is far superior. www.redleafinc.com
Thanks Geodan for continually being willing to share your knowledge about the specifics of the business. If the oil from the Enshale process commands a premium, then that is even better. WTI is currently trading around $100, but Brent and most of the oil produced from the Gulf of Mexico commands a refining premium and sells for around $110.
I don't understand that statement on the website about turning it into refined products. If they could put oil shale into one end of the plant and produce gasoline out the other end, that would truly be revolutionary (I'm sure that is not what they mean or intend to say). There hasn't been a new oil refinery built in the United States since the 70's. You can thank the EPA for that. All of the oil in the Uinta Basin is trucked to SLC. There is no pipeline. Any "oil" produced from this facility would go to be "refined" into gasoline, diesel, jet fuel, etc at the refineries in SLC. The good news is that there are 5 refineries in SLC that have good capacity and supply gasoline etc to surrounding states, including Nevada (Las Vegas).
It cannot be refined on site. The nearest refiners are in Salt Lake City. The SLC refineries have made substantial improvements in the last couple of years to be able to refine the type of "black wax" coming out of the Uinta Basin. My guess is the type of "oil" they are getting from the shale probably has some different charateristics than normal "crude oil" and they are trying to determine whether it can be sent to a refinery like other types of crude oil or whether it has different market applications. This may be the reason it has not gotten off the ground yet. It is starting to make sense.
I don't think they have ever said they have produced 15,000 barrels of oil. That probably came from their website that says their business plan is for a plant that would propose 15,000 barrels a day.
When I first became interested in BULM, I thought Enshale was an overall drain and didn't really have any value. In fact, I attributed negative value to it, because I thought it was a waste of money. Being from Utah, people have been talking about oil shale for the past twenty yeasr, and it has always been the holy grail that no one has figured how to crack.
I originally invested based solely on the NEM royalty and lean business model. The more I have learned about Enshale, however, the more I think it has massive potential. Being an investor in several oil companies, the risks of drilling are huge. Bringing oil up from 10,000 ft below the surface is plagued with cost and time overruns, disappointing results, and sometimes dry holes. Plus, with all of the attention "fracking" is getting convential oil drilling, also has potential environmental/political risks. All of the easy oil in the US (except for the North Slope and near the coasts) has already been drilled. Mining oil shale and running it through a mill takes the risk out of drilling and bringing oil to the surface. It would seem that some medium sized oil company would be interested in the Enshale technology and investing a relatively small sum to secure the rights and a 15,000 bbls per day plant. If the price of oil stays around $100, the chances of it getting more attention is heightened.
I still think its a long shot, but if they get a JV, watch the stock go for $1 to $20 overnight.
How much is a $6million+ royalty stream worth? The Answer: More than BULM's current market cap!
The mine life of Leeville is at least 10 more years and probably closer to 15. The mine continues to dig into the BULM royalty blocks and apparently the other mines appear to be getting closer as well (it has never been clear to me exactly what the potential of NEM's other mining activities -- Turf and Lantern -- coming onto to BULM's 1% NSR royalty). It appears to be that the market is essentially valuing BULM at a discount of the royalty stream and valuing its other properties/interests at zero.
With zero debt, solid and conservative management, and a healthy income stream, its hard to not be positive.
BULM is headed back to $1.30+ faster than it came down to $.70 IMHO. The reckless selling over the past couple of months is absolutely insane for a company that has a nice steady royalty stream, a portofolio of really nice prospects (Bom Jesus and Oro Mil etc) and diversification with oil (Enshale). Any small piece of good news or a mention by a random article (like the January Effect article) today sends it skyrocketing. I'm glad I was able to add to my position at $.68. I rarely feel as confident about a stock as I do BULM. Good luck to all.
Interesting that with gold down big today, most of the gold stocks I watch are up. Goldman, Barclays and UBS are all bullish on gold during 2012. BULM has never really traded with the price of gold, so I'm not sure why I would expect it to do so now.
Bom Jesus question.
I have been reading up on Bom Jesus and I am somewhat confused by the ownership structure. It appears that there has been and is current mining being conducted at the property by artisan miners? Why is this being allowed? There are some bonanza grade gold bearing veins on the property but are the best portions of the property being mined by the artisans? Would the plan be to do a big open pit mine? Any help would be appreciated. thanks
Thanks for the post. Very interesting. I have come to the conclusion that the BULM will need a JV to unlock the value of either the Brazil properties or Enshale. The revenue from Leeville is nice, but is not enough to do more than limp along. This stock is a definite buy under $.80.
Correct. The case never even got close to trial. NEM and Barrick filed motions for summary judgment on laches and rules against perpetuities defenses and the district court granted those motions. Essentially, the arguments were that BULM sat on its rights for too long without doing anything and therefore whatever claim to rights it thought it might have had and that the agreements were void. That discreet issue is on appeal to the 9th Circuit. If the 9th Circuit reverses, they don't decide the case in favor of BULM, only that it was not appropriate for the district court to grant summary judgment on those narrow issues. It is a long hard slog against the best attorneys money can buy.
The 9th Circuit is a black hole. Don't except anything for a couple of years from now. By the way, this lawsuit is an extreme long shot. Even if they win at the 9th Circuit, the case will get remanded for trial because BULM lost in the first round on summary judgment on a technical legal issue. It will just go back to the district courts and would then take several years for that to resolve and if they won, then it would be appealed again. Even in the best case scenario it would seem unlikely that BULM would see any money during the next decade. However, any victory at any court will be huge for the share price and substantially increase the chances of an out of court settlement.
Agreed. All of these problems are short term issues and Newmont has lots of incentives to make this mine profitable for a long time. Hopefully these short term problems won't continue to hurt BULM's earnings. Can't understand anyone wanting to sell at .70 cents. Fear seems to be driving reason people to liquidate otherwise sound long term investments.
I found it in Newmont's latest quarterly report.
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Nevada, USA. Gold production decreased 6% due to lower mill grade and throughput, partially offset by higher leach placement and recoveries. Open pit ore tons mined increased 167% as the remediation of the Gold Quarry pit slope failure was completed and additional ore tons were mined from Twin Creeks due to mine sequencing. Leeville experienced ground movement resulting in damage to the ventilation shaft and other infrastructure. While not impacting current year production, further underground development is being deferred until required repairs are completed in the first quarter of 2012. Costs applicable to sales per ounce increased 15% due to lower production, lower silver and copper by-product credits and higher royalty costs. Amortization per ounce increased 14% due to lower production and higher mine development costs.
Remember that Newmont reported that they had an earth shift at the Leeville mine which sustained damage to a ventilation shaft etc and that they were deferring futher development until the repairs could be completed in the Q1 2012. I have no idea whether that will impact production this quarter, next quarter, or at all. The erratic trading could be related to that... the report should be out soon and we shall see. Unfortunately, our guys don't have a great relationship with NEM (see lawsuit) and therefore most of the information BULM gets, I think they get the same way we do -- by reading publicly released info. Hard to predict when you don't know what the heck is going on.
Clearly if the company had GOOD news they would have issued a press release that said, we poured the dore bars, we got paid millions of dollars, the grades are high and the we are recovering a high percentage of the gold and silver (just like we told you we were going to do). The company is probably reluctant to issue a press release that says, after considerable delay we poured the dore bars, had to repour them and do further refining because of significant impurities, we didn't get paid as much as we had hoped, the grades or ore are not as high as we thought, and we are not recovering the percentage as we planned, and the CLI circuit isn't completed on time, and we ran out of money and had to accept a horrible financing deal to raise more cash to get us through while we try to figure everything out and by the way, we are sorry be just diluted shareholders by a significant percentage because it was the best deal we could get.
They didn't issue that press release, but saying nothing is just the same. Still holding.
And saying in the press release that they have received revenue from the sale of dore bars, but have yet to disclose said revenue or the problems with the refining process certainly raises some questions about the amount of revenue they projected in prior press releases/company presentation, the richness of the ore, and the rate of recovery. Give us the full story, please.
A 10% loan fee is a steep price to pay for a loan that you don't need (i.e., just an insurance policy). I wish they would just give us the straight talk and say we need more cash to get us through start up to full production.
I too thought that news of gold production would move this stock. I have come to believe, however, the only thing that will move this stock is proof that FR can mine profitably over time. There is too much doubt floating around about the costs of mining/sustainability (e.g., water able issues) to justify a significantly higher price. The reason why I haven't sold is because I believe FR will ultimately prove this is a very profitable venture. If it can do so, the upside is HUGE.