654 Meters of 1.4 g/t Au Equivalent
Nov 4, 2014
Of course the stock went down on the announcement. Who on earth would want to invest in a company where every hole is reporting company-making intercepts?
In years past it was said that if a stock traded more than 5% of the float in a given week, it was likely a climatic move: a potential turning point.
On Friday of last week many major gold and silver stocks showed every sign of capitulation. For example, these shares showed the following volume for the week.
Adding NYSE and Canadian weekly volume (If Appropriate) With thanks to Roger Reynolds.
Endeavour Silver 9%
First Majestic Silver 17%
Hecla Silver 11.77%
Silver Standard 21.9%
Allied Nevada 35%
Barisan Gold (BG-V) has the misfortune of residing in Indonesia where the government has gotten especially stupid about mining taxes. Basically, in every mining cycle, when governments see mining companies actually make money, they get jealous. You see, governments are made up of a variety of individuals who are too lazy to work and too nervous to steal.
When prices of commodities are low, governments welcome the billions of dollars mining companies have to spend on exploration just to justify a mine. When the companies have spent billions more actually constructing a mine, the governments think it’s a great idea because they realize they are going to collect a lot of taxes and many well-paid jobs will be created for their citizens. It’s only when mining companies actually make money after years of dumping money into what seems like a bottomless pit that governments have problems.
Mining companies want to operate in an environment where they understand the rules. They can work out for themselves if it’s even possible for them to make money so they insist on firm and fixed laws. Governments on the other hand look at corporations as cows to be milked when they need to hand out more goodies to the electorate to gain votes to retain power. So they simply change the rules whenever it suits them. When times are tough governments welcome the investment in exploration, but when times are good, the same governments want to kill the golden goose.
Mining is a big part of the economy in Indonesia as it is in the other countries on the ring of fire. The mines are so high-grade; they will be in production, no matter what the price for copper and gold. The only issue will be who makes the money.
Indonesia got stupid and greedy and it cost them. Newmont and Freemont have to pay a lot more in taxes. But both the government and the mining companies will survive, at least until the government gets too stupid.
Meanwhile, almost out of sight, Barisan Gold keeps coming up with these incredible intercepts on their Upper Tengkereng gold rich copper porphyry on Sumatra.
(Click on image to enlarge)
In early September they announced results of 890 meters of 1.3g/t Au equivalent from surface in hole UTD-008. That was after 508 meters of 1.3g/t Au equivalent in hole UTD-007 in June. And that was after 272 meters of 1.3g/t Au equivalent in hole UTD-006.
Young management runs Barisan and it’s time someone under the age of 70 stepped up and started running mining companies. They have managed to find funding at a very difficult time for both gold and idiots from the Indonesian government.
The Barisan porphyry belt is going to be a mine. The company anticipates releasing an initial 43-101 resource by the end of 2015. In addition to the seven gold rich copper porphyries already identified, the company has a 470,000 ounce gold resource at their Abong epithermal gold project.
Two or three years back, drill intercepts, such as Barisan has been reporting, would have justified a $250 million market cap. Thanks to the fools running Indonesia, Barisan has a tiny $5 million market cap. Even the fools can’t keep the price down that low for long given the quality of the intercepts.
I am an investor in Barisan. They are not an advertiser currently but might be in the future. As always, you are responsible for your own due diligence.
BG-V $.135 (Nov 3, 2014)
BRSGF-OTCBB 40.7 million shares
Barisan Gold Corp website