Base Metals Ltd (BSM.ASX) offers one of the best exposures to the base metals industry if you believe that industrial metal prices are going to stay high. i.e. That China and the third world are expanding at such a rate to offset weakness in the developed world, and that the developed world is about to be transformed by globalisation....nevermind what is happening in Greece. I am in the Philippines as we speak. The economy here is very strong. Property prices are booming, and yields are still very reasonable compared to the rest of Asia. There are a lot of people working in the coffee shops, whether call centre agents, programmers or the like. Suzuki has a 80,000 motorbike plant here, and has committed to a new 200,000 unit plant.
So why BSM? The company has an established treatment plant at Hellyer, Tasmania. This is an old mining centre operated by Aberfoyle before if I'm not mistaken. The new operators are modifying the plant and recommissioning it on the basis of extensions to worked out operations. I see a lot of upside if they can 10 years more operating life from the project area. The company is only capitalised at $42mil according to Google Finance, and they have $15mil in cash, they own the treatment plant. I think these are pretty humble numbers, so I agree with the CEO...there is potential for a revaluation up to $500mil; with excitement for traders on every drill hit. Some drilling results out already look good. I jumped on this stock because the technicals look good. The 20c support level looks good...so I've grabbed some. Their moving average is about to cross, and sellers have backed off.
I'd not be surprised to see a Japanese, Korean or Chinese trading company back this company with further development finance. i.e. Any new development headings will cost money, and I'm unsure how much of the $15mil is left. Besides, I do need to do more research. But looks ok so far. More info - File 1 - File 2
No comments:
Post a Comment