RE: RE: RE: Junior miner powers higher on gold roy The Magellan deal is a sale of a NSR (net smelter royalty). NSR's are almost always 1-3 percent in size and are calculated on the total amount of metals mined less a few small deductions. If I am reading your stuff properly it appears you are proposing that BCG get involved in the forward selling of gold. Although it sounds good in theory, it is actually a risky transaction that is difficult to pull off on small scale mines where the production is generally quite variable.
BCG would have to find an investor who believes there will be production in 2012. That investor would assess the operation and buy a set amount of gold at a fixed price (generally a decent discount to the market price). BCG would then be obligated to supply said amount of gold to the investor by the agreed upon time. Given the small amount of gold produced in 2011, the typical nuggety and erratic nature of these deposit types, and the general downtrend in gold prices I would guess that BCG would be hard-pressed to find anyone willing to forward purchase more than a couple hundred ounces and it would need to be done at a good discount to market.
To keep things simple I would either mine if it is profitable or shut down if it isn't. Although I am not exactly certain what the costs and nets were last year, I would assume that it wasn't profitable. Given that, the logical course of action would be to shut down.