RE: What is up With BRD? - Management Risk
Josa:
Lets not forget that the recent "fiscal cliff" and world financial turmoil played havoc with the "risk-on" "risk-off" trade aspect of market appreciation of junior miners. Historically, in a gold market cycle, the T1's with be the beneficiary of new money, with profits being redeployed into the T2's then the producing T3's (unhedged) and then finally the T3's with a hedge (or streaming agreement), etc. With varying combinations of T3's.
Nolan Watson's interview in the PWC link posted is adamant that management risk is one of the key parameters in his bucket list. Point being, I've seen first hand the (reactive versus proactive) management style of managers coming from the milling or other sides of an operation. In an ideal world, a professionally designated manager with face to boardroom experience is the ideal; while not always possible. Plus there is a HUGE difference between and exploration, pre-production and steady state operation. Hence the recent misfire(s).
The recent announcement of DR (not salesman Dave Russell) could be an attempt to mitigate/address the management risk of BRD as per Nolan Watson's concern for ALL managers if the streaming companies that he brings into his portfolio.
See the comments/exchange at the end of the link posted below (borrowed from the Sandstorm Board):
https://www.investmentrevaluationcatalyst.com/2012/12/brigus-grey-fox.html
BWDIK? The gold market cycle (T1, T2, T3) has been a historical market phenomenon. BRD has been addressing/de-risking some of the areas where investors MAY have cause for concern in order to move from T3 to a T2 (mid-tier). Sometimes opportunities (like using an adjacent property for access to GF UG) can save MILLIONS in development costs, provided that the overburden, strike and dips are favourable.
Cheers
Stanley