Thanks for your input and letting me benefit from your experience. This is my first serious trade with a miner, first BK-ish trade - lots of lessons. The most painful lesson so far is to find that there is not enough standardization in how appraisals are done to render reserve and resource estimates reliable. We had a very significant downward revision on Hollister and may yet have one for Burnstone which might be lethal to a value thesis. I am not sure how to evaluate the properties other than to take the book value and guess at a discount due to the context.
We have confirmation from the media (and politely echoed by posters) that Gold One is a potential buyer and in one of the monitor reports there is confirmation that Wits gold is part of a consortium interested in Burnstone. Since Wits Gold is small, the other unknown member(s) of the consortium probably matter more. Hopefully they have deep pockets and are more focused on ten years from now than today. The rumor mill (i.e. Sierra World Equity) has touted AngloGold Ashanti and Gold Fields as potential buyers. For AU Burnstone at least matches the general profile of what they say they want - a property developed by a junior that is near profitability. For Gold Fields, Burnstone should remind them of Deep South and inspire the confident hope that they could make it profitable (assuming they agree with previous management that long-hole stoping is the right method for Burnstone). Further, the restructuring of Gold Fields may be preparation for acquiring Burnstone. There might be enough interest to bid it up to the profitable-for-GBGLF-shareholders range, but I am hesitant to average down without clarity on the book value of Burnstone.
AI
