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Black Mountain Resource : Buy at 7.6p with a 12p target

By Doc Holiday | Thursday 22 August 2013


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


Black Mountain Resource (BMZ) is an AIM listed silver mining company with three projects in the United States, Its Conjecture mine is in Idaho, the New Departure and Taboor projects in Montana. All are well positioned and historic data indicates they sit on potentially huge resources. That is not discounted in the share price today.

 

The New Departure mine is on the verge of high grade production. Next in line is Conjecture mine where we already have a mine development plan (with Taboor a worthy long term asset Black mountain have secured funding thus the next step is to get the greenbacks in the till.

 

Black Mountains sample data has become more and more appealing with a recent update on New Departure here:

 

"We are delighted to report these high grade samples of up to 3,452 g/t of silver from multiple faces. These, coupled with continued high grade results from sampling of the Bonanza Zone, as well as our recent identification of two new potential mining zones, are highly encouraging as we approach the Main Zone and first silver production. ''

 

''More importantly, shareholders will be able to derive significant benefits through sustained production both in the short term and in the medium / long term where consensus commodity forecasters see silver returning to stronger prices over the coming years."

 

Common sense says we revisit over the coming months to quantify the real potential of Black Mountain, which is run by Range Resources (RRL) boss Peter Landau and like Range has a dual listing in Oz. However at a sub £7 million Market cap, the risk reward trade off looks attractive.
 

However I suggest investor/shareholders should muse through Ben Turney’s piece as he has done a great job highlighting the recent financing deal – Ben’s epic can be found  here:

 

It’s been tough over recent months to secure funds in this sector  - it is easier finding rocking horse shit. But I sense that the silver price and sentiment is turning. On a risk reward basis it is worth a nibble.



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