As promised,i'll share some facts and actual progress about bahvest today,the company had drawn market attention recently due to gold price continue to rise and should break historical new high soon.
Bahvest had started gold mining business in sabah since august 2018,they had acquired the business back to 2016 when gold price is hovering at 1000-100usd level.But as of today,gold price already went up to above 1700usd per ounce,and the gold rally has come with best timing as the gold production of bahvest is set to increase sharply in coming quarters.
In order for you guys to understand the business and position better,i had summarized the periodical actual progress of bahvest's gold mining business,then you can judge yourself.
Bahvest's gold mining business performance since august 2018:
|
Date |
production |
Gold division Revenue/Net Profit(RM millions) |
Gold price(per ounce) |
Descriptions |
|
August 2018(2nd quarter FY2019) |
30.1kg |
Revenue:RM1.027m Net profit:(Rm2.483m) only sold 6.4kg gold and the balance 23.7kg gold keep as inventories, thats why revenue is low and making losses. |
1180-1200 |
Ore processing plant to process 1200 tonnes of ore is
ready.Bahvest started to clear top soil on the mines site but
surprisingly found gold in soil,so they decided to modified the plant a
little bit to process soil instead of high grade ore which content much
more gold. |
|
3rd quarter FY2019 |
62kg |
Revenue:RM11.49m Net Profit:RM1.337 sold 69.34kg gold and balance 17.26kg keep as inventories. |
1240-1260 |
Gold production is increase further but consider low,as
bahvest is solving some technical problem faced by its plant,as well as
haven’t started to mining the high grade ore. |
|
4th quarter FY2020 |
138kg |
Revenue:RM26.85m Net Profit:RM9.53 sold 155.9kg gold and no balance is keep for inventories. |
1290-1310 |
Gold production is increase further and the plant started
to run smoothly,but production still consider low as bahvest still
processing top soil and haven’t mining the high grade ore. |
|
1st quarter FY2021 |
131kg |
Revenue:RM22.89m Net Profit:RM12.3m sold 131.12kg gold and 29.26kg silver. |
1300-1380 |
Gold production stabilize at 130kg++,still processing top soil and haven’t reach the high grade ore yet. |
|
2nd quarter FY2021 |
95kg |
Revenue:RM19.00m Net Profit:RM4.39m sold 95kg gold 18.83kg silver,the cost had increase due to effort to speed up soil clearing activity. |
1420-1500 |
Gold production is decreased due to lower grade feedstock
and rainny season,bahvest purchased 6 new truck to speed up the removal
of top soil so they can process high grade ore earlier. |
|
3rd quarter FY2021 |
123.96kg |
Revenue:RM24.70m Net Profit:RM2.05m sold 124kg gold and 12.73kg silver,the cost increase further as the process of high grade ore had finally started during the quarter,addition cost is needed to expand workforces,equipment and technical adjustment. |
1490-1510 |
Gold production is rebound from previous quarter low.and
FINALLY,the process of high grade ore had started,they expect the new
sulphide burner to be commisioning by 4th quarter to speed up the ore processing flow,higher production is expected in comings quarter. |
|
4th quarter FY2021 |
??(my estimation= 130-150kg) |
?? |
1550-1600 |
?? |
|
1st quarter FY2022 |
??(my estimation=below 100kg due to MCO) |
?? |
1680-1700 as of today. |
?? |
|
2nd quarter FY 2022 |
??(my estimation=above 200kg) |
?? |
?? |
?? |
|
3rd quarter FY2022 |
??(my estimation=above 200kg) |
?? |
?? |
?? |
|
4th quarter FY2022 |
??(my estimation=above 200kg) |
?? |
?? | ?? |
As you all can see,bahvest had started gold mining since august 2018.Innitially,the plan was to remove all the top soil which cover the high grade ore,then go for ore processing directly.
But surprisingly,when they started to remove soil,they found gold content in soil too,so they change the plan,to process soil before going deep into high grade ore.As an result,even the gold mining business had started since august 2018,but bahvest is only process soil all this while until 4th quarter 2019.
What is the different between soil and ore?under most circumstances,miners will just remove soil to other place as the gold content is normally low,even bahvest able to process good amount of gold from soil,but the high grade ore covered by soil will content much more gold,and ore is one we should really focus on,not soil.
So,as bahvest had started to mining the high grade ore since 4th quarter last year,we can expect much higher gold can be produce in coming quarters,maybe from 1st quarter 2020 onward.
Bahvest currently owned 317.7 hectare gold mining land in sabah,and they had hired famous austrialia mining research company optiro private limited to conduct research on the 1st 28 hectare land,which means there are 289 hectare land remain unexplored as of today.
For the 28 hectare which already explored,optiro had estimated there are 6500kg gold and more than 20000kg silver,and the gold content in ore should be 3.71gram/tonne.
As the current processing plant set up in 2018 can process up to 1200 tonnes of ore per day,so we'll know that when the plant is running at full capacity,bahvest can produce up to 4.43kg gold per day,which means 132kg a month or 394kg per quarter,compare with 120-140kg per quarter previously.
Yes,even we consider the plant stop precessing ore on sunday,so 6 day a week,bahvest still able to produce 340kg++ gold in single quarter.Remember,this is the best case scenario only.
I am quite conservative,so i do not expect bahvest to produce 340kg gold,my assumption is only 200kg++ per quarter,that will be good enough for me,and i think this is very conservative target since bahvest able to produce 120-140kg gold by processing low grade soil only,so i am quite confident the 200kg target can be achieve easily.
Based on current gold price,200kg gold is worth more than RM50 million in value,much higher than RM20-25 million achieved in previous quarters.And since the mining cost is fixed in nature,so the profit margin will be fantantic,could even fetch more than 40% Net margin if gold price stood at 1700usd or above.
The risk associated to my analysis included gold production below expectation and gold price drop back to below 1500usd per ounce.
I wont ask you to buy or not to buy,as it is all depends on your risk profile.What i do is simply summarize the actual progress and result,and a little bit of my logical analysis,to let you guys have a clearer idea or picture about how bahvest's gold mining business is doing,and what can we expect in quarters to come.
No matter you decide to buy on sell,your decision wont affect share price much as the daily transaction volume of bahvest more than 10 million shares,and the share capital is 1.2 billion shares.So,whether bahvest will continue to rise or not,it is mainly depends on gold price and actual gold production,not a article write up by me.
So,to buy or sell or stay away,all up to you,think about risk and reward wisely before making any decision.
Good luck guys.
https://klse.i3investor.com/blogs/fireraincollection/2020-05-18-story-h1507089919-gold_rush_is_happening_bahvest.jsp
