The $50k Challenge Update 21 – 09/07/2021
Stock Code: BMM
Shares Purchased: 190,000
Share Price: $0.20
SOI: 45,000,000
Cash: $6,500,000
Listing price: $0.20
Market Cap: $9,000,000
EV: $2,500,000
Reason for buying:
Director ownership: One director is subscribing for $200,000 in shares in the IPO. Other directors only own options. BMM however is a spin out from JDR who owns 22% of BMM. The directors of BMM who are also directors of JDR own over $2m in JDR shares. So even though they do not own a lot of BMM shares they have a huge indirect interest through their affiliation with JDR. In addition to this Sean Murray has also joined the board who has over 40 years’ experience in the mining industry. He was also on the board of Rio Tinto, one of Australia’s largest mining companies boasting a mc of $50b. I’ve highlighted this as BMMs borate lithium lease is very close to a borate lithium lease which Sean managed and operated for RIO.
Structure: Currently unknown top 20 as company hasn’t listed yet. In saying this however it will be an extremely tight register with the top 3 holders owning 50% of the company. JDR will own 22% of the register and their shares are escrowed for 2 years.
Sandfire (ASX:SFR) have also cornerstone 22% of the register. SFR is a $1.2b company who was behind ASX:ADT which listed 3 years ago and has since risen 1,200%. BMM also has a director from ADT joining the board which is a fantastic outcome. SFR shares are also escrowed for 2 years.
Overview of BMM Projects:
BMM is focused on the early-stage exploration through to development of borate and associated lithium in the Balkans. The Company’s Projects comprise the Rekovac Project, the Dobrinja Project and the Pranjani Project. The three Project areas are located within the Republic of Serbia and cover three Neogene aged sedimentary basins in the north-west trending portion of the Vadar Zone. With the exponential increase in electric vehicle production and the renewable energy revolution, lithium production is critical. Due to this. the sector is expected to hit two trillion dollars by 2025.
In summary, BMM has a very tightly held share structure, high class management team, in a hot sector as well as a very low mc and ev compared to their peers.
Risks:
1) Obvious risk with any explorer is share price and success is highly dependent on drill results.
2) More capital will be required in the future, however if company milestones are met then capital raise price should be much higher than current levels.
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