Barkerville Gold Mns Ltd BGMZF

RE:RE:RE:RE:RE:[Ask Yourself]

[yaponski]

boss_waz wrote: So we agree:
- not sure where gold will be in say 6-12 months
- PEA is interesting

Points of contention:
Does 'pebble' have the QR Mine?
Does pebble have the QR mill?
PVG has no mill, great grades but potential less than BGM...and is at $5.6...?
BL is meaningless...

Lets discuss a hypothetical scenario:
- gold reaches the level of $1600 sometime in 2014
- the gold industry begins recovery and money starts 'looking' with interest

What value would you put on the QR mine and Mill (given the above)(FC says $90mill replacement)?
Now, (given the above) wouldnt that make the 25-50k oz of BL gold quite valuable (assuming profit)...as it would provide the means for BGM to sustain while the industry ramps up...?

Hypothetical of course....

I don't see much value in the QR mill. 

1. There isn't enough ore available from QR and BL to do much investment in process optimization. QR and BL combined hold about 350K ounces. Not that much to ramp up a profitable mining operation.
2. BGM has proven quarter after quarter that the more gold in tries to produce from QR mill the more money BGM  losses. Check finanicals in Sedar.com. It is all there in black and white print. When you are in that kind of situtation, it is a fools game to try make it up with volume or time. You need to change the processing economics. But the price of gold is falling so the economics get worse and worse. If you didn't turn a profit at $1650 / oz gold then how will you do it at $1250?  
3. Extracting QR Mill scrape metal is probably going to yield less than the cost of extraction and doing the site clean-up.

So, I would assign $0 to QR mill. Could I replicate QR Mill for $0? Well of course not. But would anyone want to build QR Mill in its current location given the currently permitted resources? Obviously BGM wanted to but I don't expect many to line up to buy out BGM's investment.

Ok. Maybe someone like an Impact Silver could make money from QR and BL operating with existing permits and infrastructure. Impact is very successful running somewhat similar scenarios (few resources + existing infrastructure in brown fields) in Mexico and hey, maybe Impact want to trade Mexican new tax issues for T'Silquot'in troubles....