After watching the slagging match going on over the last few weeks, it is with some trepidation that I make my first post on here!
I am a relative newbie to the junior explorers and subscribe to Casey s tell me what I need to know..
I asked Caseys for a copy of their original recommendation, which was back in Sept 2010..
Even then they were basing their recommendation on a potential takeover...
I have included it below:
New Company Recommendation: Tempting Takeover
BYV is a company we recommended to Casey’s Investment Alert subscribers in an earlier private placement, before the recent drill results greatly reduced the risk in the play. Now it’s looking almost correction-proof, making it a shot worth taking, even without PP warrants.
BUY ON WEAKNESS—BYV is about as straightforward a potential takeover story as we’ve ever seen. Rainy River Resources (V.RR) has been advancing a large (5.1Moz Au) and growing gold resource in northwest Ontario. BYV has a claim block immediately adjacent to RR’s gold resource, and recent drill results show that the mineralization extends from RR’s property right onto BYV’s. But let’s take a quick look at the Ps...
People
BYV CEO James Pettit has a financial background and involvement with numerous resource companies. BYV President Don Huston has 25 years of experience in the industry and was previously a geophysics contractor. Exploration Manager Bob Marvin is a geologist with more than 30 years of experience and is backed up by Consulting Geologist David Busch, a Phelps Dodge veteran with two significant gold discoveries under his belt.
Frankly, the lack of major discovery experience among top management has been a concern to us and is one reason we shied away from this company in previous years. But given the clear takeover potential we’ll describe shortly, we decided to take a chance on this team, and we have to say, they have delivered results on the ground, greatly boosting our confidence in them.
Property
Here’s the crux of the spec: BYV’s Burns Block is immediately adjacent to RR’s property, and the mineralization has been shown to continue, with high grades, onto BYV’s land.
Drill results out just days ago show solid hits in two parallel zones right on strike from RR’s ODM zone. Assays included:
Bayfield Ventures Corp. V.BYV, BYVVF.OB, FRA.B4N, www.bayfieldventures.com
Price
Share: C$0.55
MCap: C$22.5 million
On 8/27/10
Shares
SO: 40.9 million
Est. FD: 67.7 million
Est. as of: 8/10
Warrants
Est: 23.4 million
C$0.125 – C$0.50
10/30/11 – 8/18/14
Options
Est: 3.4 million
C$0.12 – C$0.43
6/16/10 – 7/21/15
Cash
Est C$5.9 million
Burn: TBD
As of: 5/10
• • •
3.0 meters grading 31.7 g/t gold, within 9.0 meters of 12.9 g/t Au 1.0 meter of 17.2 g/t Au and 2.0 meters of 11.3 g/t, within 4.0 meters of 6.4 g/t Au 1.0 meter of 17.0 g/t Au and 2.0 meters of 9.9 g/t Au, within 20.0 meters of 1.2 g/t Au
CASEY’S INTERNATIONAL SPECULATOR
6Now, these hits are all pretty close to the property line, so they don’t yet indicate that BYV has a large gold resource of its own. However, we think the odds are against both parallel zones stopping right at the arbitrary human property line, and if we’re right, there should be more high-grade drill results ahead.
Not only that, but RR’s published resource model shows an open pit design that covers about one-third of BYV’s Burns Block. So, even if the mineralization on BYV’s side of the boundary doesn’t amount to much, it seems all but certain that RR – or whoever takes RR over – will have to make a deal with or bid for BYV.
This potential takeover is as close to a “sure thing” as you can get in our business. BYV is very busy, not only drilling the Burns Block, but also on other prospects they have in the RR area, working hard to add as much value as they can before someone takes a run at them.
Key point: A takeover could happen at any time, especially now that RR’s management has had a chance to see high-grade hits on BYV’s land, and BYV shares remain relatively cheap.
Promotion
This story was completely under the radar when CIA subs bought into the private placement last April, but it’s trading on good volume now that good drill results have solidified some of the company’s blue sky hopes. As an easy takeover target, BYV doesn’t actually need much promotion, but the story is now clearly getting out there. We’re not worried about promotion.
Push
There are more drill results on the way, with two rigs turning. Significant step-out holes with similarly high-grade results as those obtained already by BYV could send these shares through the roof in a day, and that’s a possibility.
However, even if nothing more is discovered, RR still needs BYV’s land (and will want the high-grade gold already found) for its planned open pit mine. So a buy-out bid is also a possibility at any time – and until it comes, BYV will try to add as much value as it can, to push the takeover price as high as possible.
Politics
Ontario. No worries. Enough said.
Paper & Phinancing
We don’t have up-to-date numbers on what BYV is spending as they drill, but they raised C$4 million in the private placement we’ve mentioned, which is more than enough to carry out their drill program this year. If they don’t get taken out, they will have to raise more money, perhaps this fall, perhaps early next year, but the company may not last that long, so we would not hold our breath for that.
Plus, all of the company’s warrants and options are now in the money, so they will probably see a lot of cash coming in from those, without new dilution.
CASEY’S INTERNATIONAL SPECULATOR
7
Price – DO NOT CHASE THIS STOCK!!
There’s a particular reason for trying to buy under market: the shares issued in last April’s private placement come free trading today (Sept. 1). Those shares are deep in the money – more than double – so it’s highly likely that many of their owners will be taking profits, starting today.
If ever there was a time to listen to our constant urgings not to chase stocks, this is it. Investors up 120% will take 110% with a smile. Some Casey Investment Alert subscribers, and we ourselves, may be selling some shares to recover our initial investments. If that makes you uncomfortable, feel free to skip this pick, but given that BYV shares are already way up, we see this as working in your favor – we hope you get a better price. Watch the bid-ask spread and aim low. The selling pressure may last for some time, as not everyone who bought the PP will be ready to act at once. These shares already fluctuate down to 45 - 50 cents regularly – getting in for less than 45 should be doable if you don’t chase the stock.
That said, this is more than a good drill play, it’s a clear takeover waiting to happen, and that makes buying now, even with the potential for a big correction ahead, a great speculation. BYV may not be an independent company when the correction hits, or, if it is, the takeover offer could jump the share price back up again. With that reassurance, we also suspect that the stock will come under a lot less selling pressure than most.
Bottom line: try to get in under market, but don’t dawdle too long, because there’s no telling how long these shares will be around.
I looked up Bayfields website to remind me of the size of the RR area property that Bayfield has...
It is made up of the Burns Block as well as Blocks B and C so it is larger than just the Burns Block...It is just most drilling has been done in the Burns Block with just mapping done in Blocks B and C....
So there is more to the area than just the Burns Block
Anyway, at the end of the day there is very little any of us can do about the share price...so why moan to each other...if you like the story and trust your advisors ..stick with it...otherwise take the hit and move on to another company....I bet we have all had to do that
Ososlo