3 Reasons to add Bezant Resources #BZT to your Watchlist
Back

3 Reasons to add Bezant Resources #BZT to your Watchlist

THE CONTENT OF THIS BLOG / WEBSITE (OR CONTENT ASSOCIATED WITH IT) IS NOT INTENDED AS INVESTMENT ADVICE, IT IS FOR INFORMATION PURPOSES ONLY. YOU SHOULD TAKE PROFESSIONAL FINANCIAL ADVICE IN CONNECTION WITH, OR INDEPENDENTLY RESEARCH AND VERIFY, ANY INFORMATION THAT YOU FIND ON THIS BLOG / WEBSITE AND WISH TO RELY UPON, WHETHER FOR THE PURPOSE OF MAKING AN INVESTMENT DECISION OR OTHERWISE. WE ARE NOT REGULATED UNDER UK FINANCIAL SERVICES LAW. THE AUTHOR OF THIS BLOG MAY HOLD AN INTEREST IN THE STOCK FEATURED.

 

BEZANT RESOURCES #BZT
Share Price: 0.465P
Market Capitalisation: £3.6M

 

Bezant is a natural resources exploration and development company with copper-gold projects in Philippines and Argentina. Mankayan their Philippines project is,  “One of the most significant, undeveloped, copper/gold deposits in the world that is defined to an advanced resource standard.”

 

3 Reasons to add Bezant Resources #BZT to your Watchlist

 

STRATEGIC REVIEW TO FOCUS ON THEIR TWO PROJECTS

On 22nd March 2018 the board of Bezant Resources announced a, “Renewed focus to be applied to the Company’s copper-gold exploration assets and development portfolio in the Philippines and Argentina, including the Mankayan copper-gold  project.”

PROJECT ONE

THE MANKAYAN COPPER-GOLD PROJECT – PHILIPPINES

The Mankayan copper-gold project is situated in the Mankayan-Lepanto mining district of the Philippines, an area of established copper and gold mining. The deposit is located approximately 240km north of Manila and 6km east of the copper/gold mine owned and operated by Lepanto Consolidated Mining Company.

There was an independent JORC ore reserve and mineable inventory statement and conceptual study for the Mankayan Project released in January 2011.

The results are as follows:

Probable ore reserves of 189 million tonnes at 0.46% copper and 0.49g/t gold resulting in total recoverable metal reserves of 811,000 tonnes of copper and 2,210,000 ounces of gold.

Last hole, BC-60, drilled by Gold Fields Netherlands Services BV (details of which were announced on 12 February 2014) returned 342m of core at an average grade of 0.6% cu and 1.01 g/t au.

Eastern side of the ore body has the propensity for an increase in the resource tonnage and grade to add further value to the overall economics of the project

Independent conceptual study and reports in 2014 suggested a potential post-tax IRR of 21% and post-tax NPV of approximately US$793m at a 8% discount rate

Total post-tax net cash flows of approximately US$3.7 billion

Colin Bird, Executive Chairman of Bezant:

“I am pleased to have been part of this review process and I am delighted to be part of the team taking Bezant forward. The Mankayan property is a world class asset and highly advanced and has substantial potential in the current marketplace where there is demand for large, new copper projects.”

PHILIPPINES AS A MINING JURISDICTION

All investments carry risk and when considering countries in which to invest, it’s always worth checking out that country’s policy.

The Philippines was the biggest nickel ore supplier to top market China last year but the industry is facing uncertainty due to a crackdown by the current Philippine President Rodrigo Duterte.

According to Reuters, Duterte has warned miners to follow tighter environmental rules or shut down shortly after he took office in 2016, has so far upheld a ban on new open pit mines, despite a push by senior officials to soften the policy.

Even though Bezant’s Mankayan project is planned as an underground mine and therefore so far unaffected by the open pit ban, Duterte is (and rightly so) very pro-environment, so it’s worth keeping an eye on any planned policy udpates.

One such update being planned Philippines is to limit the amount of land that miners can develop at any one time to boost environmental rehabilitation.

 

PROJECT TWO

THE EUREKA PROJECT – ARGENTINA

The Eureka Property covers in excess of 10 thousand hectares and is located in the northwest corner of the Jujuy province in northern Argentina, adjacent to the border with Bolivia.

There is excellent road access to the property from the provincial capital of San Salvador de Jujuy approximately 5 hours drive to the south, with there being easy access within the property over a series of good quality gravel roads.

“To date, no JORC compliant or equivalent resource estimate has been established, but historic exploration activities have been conducted on the project area since the 1980s with unaudited unclassified estimates in the order of, in aggregate, up to approximately 62 million tonnes grading at 1% copper and approximately 52,000 ounces of gold as credits.

Desktop review and site visit has identified that the potential gold contribution could be significantly greater than historically indicated”

Colin Bird, Executive Chairman of Bezant:

“The Eureka Project has underlying fundamentals, which make it drill ready and amenable to further work as we continue to assess its potential and position in the portfolio.”

 

COPPER

On 22nd March in an RNS entitled, “Strategic Review and Issue of Equity“, Laurence Read the CEO of Bezant Resources, commented:

“The Copper price over the last 12 months has risen consistently and we believe that the mid to long-term potential for copper will be strong. With two existing copper assets in our portfolio and contained tonnage of Cu in excess of 800,000 tonnes from the Mankayan Project alone, we shall now seek to identify and assess opportunities to advance this major project.”

A recent article in Mining.com entiled, “Copper supply crunch earlier than predicted — experts” Arnaud Soirat, chief executive for copper and diamonds at Rio Tinto said, increased consumption from new technologies, including electric vehicles, will drive demand for the metal and its by-products.

Source: Copper Drives Electric Vehicles

“We anticipate global market supply and demand will keep close to balance in 2019 and 2020,” he said, noting that after that the deficit will become increasingly evident.

The outlook is widely shared by other experts, including CRU analyst Hamish Sampson.

According to him, unless new investments arise, existing mine production will drop from 20 million tonnes to below 12 million tonnes by 2034, leading to a supply shortfall of more than 15 million tonnes.

The situation looks even worse when considering that over 200 copper mines currently in operations will reach the end of their productive life before 2035.

Only if every single copper project currently in development or being studied for feasibility is brought online before then, including most discoveries that have not yet reached the evaluation stage, the market could meet projected demand, the consultant said.

Colin Hamilton, managing director of commodities research at BMO Capital Markets, fully agrees with Sampson.

He believes the expected copper supply crunch will become “much more real” in 2019, due to the lack of mega-projects coming on stream before the mid-2020s and as global production will peak by the second half of next year.

 

VALUATION

Bezant Resources has a market capitalisation of just £3.6m. They also have cash as they received the following amounts:

$500k for selling their Colombia asset in April (so far $450k has been received by them).
£600k from a placing on February 5th at 0.45p
£550k from a placing in December at 0.4p

I’m assuming they have around £1m in cash.

So if we minus the cash, then this means the world class sized copper/gold project in the Philippines plus their Eureka prospect in Argentina, their listing and the management is valued at just £2.6m.

In 2011 Bezant Resources entered into an option agreement with Gold Fields (one of the world’s largest gold mining firms) to dispose of their Mankayan project. The terms of the option agreement were:

o Non-refundable, upfront cash payment of US$7 million

o A further cash sum of US$63 million is payable, on exercise of the option.

On 22nd January 2014 Bezant Resources received a, “formal notification received from Gold Fields that it would not be exercising its exclusive option over their Mankayan copper-gold project in the Philippines.”

The explanation was that, “Gold Fields’ current focus in the Australasian region is on its producing Australian assets and ongoing work on the Far Southeast project, in which it holds a 40 per cent. ownership interest, located 6km from the Mankayan Project.”

As a reminder, total post-tax net cash flows of the Mankayan project is approximately US$3.7 billion

 

How does it fit in with my research model, C.C.A.S.S.H which you can read more about by clicking here

GREEN = POSITIVE

BLACK = NEUTRAL

RED = NEGATIVE

CAPITALISATION

As I’ve mentioned above, Bezant Resources is a micro cap with a resource the previous CEO Bernard Olivier, Chief Executive Officer, described as, “One of the most significant, undeveloped, copper/gold deposits in the world that is defined to an advanced resource standard.”

They also have another, less advanced, copper-gold project in Argentina.

CHART


The share price is very close to its 52 week lows of 0.33p and way off its 52 week high of 2.10p.

ASSETS

There’s no knowing exactly how much cash Bezant has in the bank currently but I would assume there’s enough to tide them over for many months, due to how much they’ve received recently from the below transactions:

$500k for selling their Colombia asset in April (so far $450k has been received by them).
£600k from a placing on February 5th at 0.45p
£550k from a placing in December at 0.4p

SHAREHOLDERS

As of 7th March the company of Chairman, Colin Bird, Tiger Resource Finance Plc held 7.45% of the company.

As of 7th August 2017 Laurence Read CEO held 138,600 shares in the company.

As of 22nd March 2018 Evan Kirby, Non-Executive Director 7,479,374 shares in the company.

As of 22nd March 2018 Ronnie Siapno, Executive Director, held 1,333,334 shares in the company.

SIGNIFICANT MILESTONE

A strategic review of their two projects is currently underway. There are now defined milestones yet but reading the RNS’s I assume, Mankayan being the most advance and with the most potential will be focused on more closely. Laurence Read commented in the last RNS release that he is, “Particularly excited at the potential to revisit the historic Mankayan engineering study and apply new technical approaches in order to further enhance the potential financial returns.”

HEAD HONCHOS

The board have considerable experience in unlocking value in projects. To read their biographies click here

If experts are to believed demand for copper will continue to rise over the next 20 years due to increased global power consumption and through renewable energy which requires much greater copper intensity. From EVs alone this consumption will increase from 286kt in 2017 to 2611kt by 2035. The only issue seems to be that supply will struggle to keep up with demand due to the lack of mega-projects coming on stream before the mid-2020s.

With total recoverable metal reserves of 811,000 tonnes of copper and 2,210,000 ounces of gold and the eastern side of the ore body having the propensity for an increase in the resource tonnage and grade Bezant Resources’ Mankayan asset has the potential to become a world class asset. This means it could, potentially, be sought after by bigger companies, especially in an environment where there’s a copper supply deficit.

To underline the potential of their Mankayan asset, Gold Fields (one of the world’s largest gold mining firms) were considering buying this asset off Bezant for $70m in 2014, when copper was not looked on in such a favourable light as it is today.

As with all small cap exploration companies, Bezant is high risk but with an asset like Mankayan, it’s also has the potential to be very high reward.

TO ADD BEZANT RESOURCES #BZT TO YOUR VOX MARKETS WATCHLIST CLICK HERE

You can hear Colin Bird, Chairman, of Bezant Resources in the podcast below:

THE CONTENT OF THIS BLOG / WEBSITE (OR CONTENT ASSOCIATED WITH IT) IS NOT INTENDED AS INVESTMENT ADVICE, IT IS FOR INFORMATION PURPOSES ONLY. YOU SHOULD TAKE PROFESSIONAL FINANCIAL ADVICE IN CONNECTION WITH, OR INDEPENDENTLY RESEARCH AND VERIFY, ANY INFORMATION THAT YOU FIND ON THIS BLOG / WEBSITE AND WISH TO RELY UPON, WHETHER FOR THE PURPOSE OF MAKING AN INVESTMENT DECISION OR OTHERWISE. WE ARE NOT REGULATED UNDER UK FINANCIAL SERVICES LAW. THE AUTHOR OF THIS BLOG MAY HOLD AN INTEREST IN THE STOCK FEATURED.

my-previous-blog-posts


To subscribe to my blog click here

 

3 reasons to add Armadale Capital #ACP to your Watchlist

3 Further reasons to add Armadale Capital #ACP to your Watchlist

3 Reasons to add C4X Discovery #C4XD to your Watchlist

 

3 Reasons to add Cora Gold #CORA to your Watchlist

 

3 Reasons to add Feedback #FDBK to your Watchlist 

3 Further Reasons to add Feedback #FDBK to your Watchlist

Another 3 Reasons to add Feedback #FDBK to your Watchlist

 

5 Reasons to add Ferrum Crescent #FCR to your Watchlist

 

3 Reasons to add Jangada Mining #JAN to your Watchist

 

4 Reasons to add Kodal Minerals #KOD to your Watchlist

3 reasons to add United Oil & Gas #UOG to your Watchist

3 Further Reasons to add Untied Oil & Gas #UOG to your Watchlist

 

upl-small

3 Reasons to add Upland Resources #UPL to your Watchlist

To read my blog post on Upland Resources #UPL click here

To read my follow up article on Upland Resources: The Sensible and Sexy Asset Strategy, click here

2 Overlooked Companies, That Could Be About to Release Signficant News

THE CONTENT OF THIS BLOG / WEBSITE (OR CONTENT ASSOCIATED WITH IT) IS NOT INTENDED AS INVESTMENT ADVICE, IT IS FOR INFORMATION PURPOSES ONLY. YOU SHOULD TAKE PROFESSIONAL FINANCIAL ADVICE IN CONNECTION WITH, OR INDEPENDENTLY RESEARCH AND VERIFY, ANY INFORMATION THAT YOU FIND ON THIS BLOG / WEBSITE AND WISH TO RELY UPON, WHETHER FOR THE PURPOSE OF MAKING AN INVESTMENT DECISION OR OTHERWISE. WE ARE NOT REGULATED UNDER UK FINANCIAL SERVICES LAW. THE AUTHOR OF THIS BLOG MAY HOLD AN INTEREST IN THE STOCK FEATURED.

Vox App Image
How to get company RNS releases sent straight to the front screen of your smartphone, as soon as they release them (for free) in 3 easy steps.

1. Download the Vox Markets app by clicking here (for either iPhone or Android).
2. Search for a company you want to receive the RNS’s from.
3. Click, “Follow” on that company’s page.

If you find this podcast useful please could you give it a 5 star rating and review on iTunes by clicking here and I’ll return the favour by giving you a mention on the podcast!

The content of this podcast (or content associated with it) is not intended as investment advice and people featured may hold positions in the companies they talk about. Please do your own research.