BC8 - Black Cat Syndicate

[System]

Black Cat Syndicate Limited is a West Australian company focused on its Bulong Gold Project situated 25km east of Kalgoorlie. The Bulong Gold Project has a history of complex, unconsolidated ownership leading to small scale but high grade production of an estimated 151,748 oz of gold at greater than 1oz per tonne and consists of numerous potentially high grade project areas on granted mining leases with drill ready targets, including Queen Margaret, Queen Margaret North, Porphyry, Woodline and Anomaly 38.

BC8 plans to complete infill and extensional drilling around initial exploration targets.

It is anticipated that BC8 will list on the ASX during January 2018.

http://www.blackcatsyndicate.com.au

 

[greggles]

Black Cat Syndicate bouncing off a low of 14c after some encouraging drilling results last week from the company's Bulong Gold Project.

It didn't take much volume to get BC8 back over 20c, so there couldn't have been many sellers under that price. I'm expecting it to consolidate a little between 20c and 25 in the short term.

 

[barney]

They do have some nice hits for a minnow Goldie ….. With an $8 million market cap and around $3.5 million in the bank there is plenty of potential upside if they keep getting good drill results.

 

[Ann]

This little goldie has shifted beyond its falling overhead resistance, is above the 200dsma and the NVI is in very positive territory (shown). The PVI is still falling away (not shown). Money flow is above the 20% level (not shown) but it seems a bit nervous and responds quickly to price movements.
A stock worth watching I feel.

 

[frugal.rock]

A stock worth watching I feel.

View attachment 92786

~100% return since you posted!
Did you watch it all that time?

I just stumbled upon this stock accidentally on the asx company list after searching cat....
I had to put my black cat down last week. RIP little Wispy cat.
14 year's young.
Cheers.
F.Rock

 

[finicky]

So, in keeping with the request that participants in the 2020 stocks competition explain their #1 choice I am going to give a rambling 'exposition' of BC8 a go. It's certainly not the stock I would put the biggest share of my money into (I have no cash left anyway) but rather, in the nature of the competition, a choice consistent with chasing a fast speculative gain.

These days I've belatedly arrived at the wisdom that many commentators and social media posters know a lot more than I do so I have become more reluctant to spew out enthusiastic text about stocks now.
I won't be referring to scrawled notes or online reports much as if I interrupt the flow, the flow won't happen at all - my approach will be discursive*
I prefer to buy stocks that have proved they can earn money so that is why a few years ago I got into NST, RRL, RMS in the gold sector - but gambling gets the better of me and BC8 got through my defences when I searched what a poster whom I follow on h.c had been talking about.
* discursive - moving from topic to topic without order

The light bulb moment was when it sunk in what a huge set of advantages entailed to a junior which aready has a small mineable resource only 25 kms from Kalgoorlie. Number one advantage is that Black Cat won't need to dilute and incur debt for a processing plant to become an active miner. There are 5 mills within trucking distance, maybe more, which I imagine will likely jump at the opportunity to toll treat or buy outright BC8's ore.

Black Cat can get a contractor to mine the ore from open pits, so again, no significant capital needed for equipment or a decline and drives. There's 168k ozs @ 2.4 g/tonne already outlined in a close sequence of optimised pit shells with the main one, 'Myhree', holding at least 100 kozs @ 2.7 g/t. All are open along strike and at depth. The ore from Myhree metallurgically tests at > 95% recoverable gold with fast leaching time and low reagent demand. From the graphics it looks like the lode starts virtually at surface with very little waste to be removed. While I don't have a real idea of the profit margin considering contract mining, trucking and toll millng, $800/oz free cashflow seems plausible at an A$2,200 gold price, but let's say $500/oz margin, that would be $50m cash for BC8 from Myhree alone, BC8 being a company with an enterprise value on Friday of ~$18m - being m.c of $24m minus $6m or so of cash. Doesn't take account of 14m escrowed shares and 17m options @ 23c avg - the management have looked after themselves, no surprise.

The big pay-off will come if/when they find a big one from a number of prospects they are drilling or plan to drill. So when considering a buy I saw this as a junior prospect where good quality ore could be dug up by a contractor and sold or toll milled to amply fund intense drilling campaigns without much further dilution. This for a company that currently (post placement @ 43c) would have only 115m shares fully diluted - of which the unlisted options exercised @ 23c would bring in another ~ $4m.

The tenement package is only 20-25 kms from Northern Star's Kanowna Belle mill and I suspect this is the front running prospect for selling or toll treating the ore. Also Northern Star (NST) is a possibility for taking out the Bulong tenements or BC8 itself (just my speculation). Having taken out Newmont's half of the superpit at Kalgoorlie, NST's management sounded a bit acquisitive about the local area?

The tenements at Bulong have had little modern exploration - it was BC8's use of Australian innovated geophysics (so called SAM surveys) that found them Myhree just 7 months after listing.

From the January 2018 prospectus it looks as though a major interest down the track will be the Queen Margaret project which surrounds the Queen Margaret mine where mining ceased in 1913. The old miners took 96 kozs out of Margaret grading at 1oz/t. Before its abandonment they dug a 400m exploratory drive east from Margaret which passed through 2 lodes and numerous 'stringer' patches. They mined a sample stope which graded at 10-12 g/t, this wasn't particularly high for them at the time, lol. Then they got water ingress and abandoned it, what with WW1 and price of gold at the time - I imagine those were factors along with more primitive dewatering technology. No-one's been back since in any serious way! A bodgy 3 holes were drilled later on but the company sounds dismissive: one hole hit a void, one was abandoned. With those grades Margaret was only mined down to 280 metres with almost no exploration below.

Black Cat's been drilling out what could be a feasible open pit around Margaret, good grades, and then with new diamond drilling below the extent of the old mine there might be an underground option from the base of the pit. Maybe they'll have so much cash from Myhree and supplementary pits that they'll be able to dewater the Margaret shaft and that old exploration drive and set up a drilling platform from down there - just my speculation.

Other prospects are Greater Woodline containing Woodline itself which I read was the richest alluvial gold field in W.A.
There's some Kanowna Belle lookalike prospect, remember, the multi million ozs Kanowna Belle mine now run by Northern Star is only 20-25 kms away from my reading of the map.
There is 'Anomaly 38' where something heavily mineralised has been detected by BC8's SAM survey lurking around and below very high grade but short intercepts drilled by Anglo Gold in 2001. Anglo was looking for very wide low grade results suitable for a multi-million oz open pit - maybe that's why they passed, don't know.

Well that's as good as I can do, I'm exhausted, doesn't take much these days. The price of BC8 is 36 cps, up 2c today, chart might have turned at 30c. The insts and sophs paid 43 cps in the placement 3 months ago. If your interest is piqued, check out the prospectus back in Jan 2018, look at the Nov 2019 AGM presentation and lurk on the chat at various places. Decision to mine Myhree and linked pits should come as early as June Quarter 2020. Look at that A$ gold price.

Disclosure: hold 40,000 BC8 shares @ average 26c, won't be selling any until at least double todays price (36c)
Sentiment: spec buy

 

[frugal.rock]

Brilliant right up Finicky!

 

[fergee]

BC8 looks exactly like my cup of tea, really interesting!

Thanks to all the previous posters for all the info and bringing this onto the radar.

 

[fergee]

• Planned Activities 2020 (from BC8 October asx announcement)
  • − March 2020 quarter upgrade Resources and commence open pit optimisation;
    
    
  • − March 2020 quarter ongoing extensional and exploration drilling; and
    
    
  • − June 2020 quarter complete the Feasibility Study leading to potential decision to mine at Myhree/Trump.
    
    Just thought I would attach this chart with this post as a rough road map to where we may be right now with BC8 not sure how well it will guide, but a nice visualisation none the less.
    
    

 

[barney]

The light bulb moment was when it sunk in what a huge set of advantages entailed to a junior which aready has a small mineable resource only 25 kms from Kalgoorlie.

Very in depth post on your reasoning @finicky …. Looks interesting … Good luck with it

 

[finicky]

I neglected to check out this share pricing factor. While I did mention shares that are under escrow, I didn't take note of the date that they can come onto the market - much earlier than I would have guessed, January 30. Also I understated the number of the escrowed shares - there are 11 million more than I thought applied. I don't think that they made this second lot of escrowed shares clear but maybe it was me being obtuse.There are a also lots of options to be released from escrow Jan 30 that can then be exercised @ 20c.

I'm guessing that this large number of released escrowed shares along with cheap exercisable options will result in significant selling which will be an opportunity for retail buyers who want cheaper shares but will disadvantage those who bought recently, so sorry I was not alert to this complication. I will still be holding through any downturn and am still possibly up for 10,000 more at a price below my average so far. Good news might blunt the effect of more selling pressure.

SECURITIES BEING RELEASED FROM ESCROW
In accordance with Listing Rule 3.10A please be advised the following securities will be released from ASX
escrow on or after 30 January 2020:
- 13,861,767 ordinary fully paid shares; and
- 12,191,112 unlisted options exercisable at $0.20 and expiring 25 January 2023.
In addition, the following securities will be released from voluntary escrow on the same date:
- 10,926,500 ordinary fully paid shares; and
- 2,600,000 unlisted options exercisable at $0.20 and expiring 25 January 2023.
Upon the cessation of the restriction period for the above stated securities, the Company will have no
restricted securities on issue.
This announcement has been approved for release by the Board of Black Cat Syndicate Limited.

 

[finicky]

Crikey, I'd better thoroughly check out the escrow factor in future for recently listed companies of interest.
Second gap down today. Not high volume, just no buying support.
Target? My shot would be the weak line of resistance/support around the 25c level if good news doesn't intervene. If continued lack of exciting news though, failure at 25c wouldn't surprise me and down towards 20c? Fully funded, lot's of prospective drilling going on. Don't think I'll add unless price gets near 20c

 

[barney]

if good news doesn't intervene.

If this doesn't slow the dip nothing will ... nice results.

Usual problem for a Gold minnow is getting enough cash in the coffers. Currently have around $2 million so likely to need another cap raise down the track but more good results like that should see them raise cash with little issue.

HIGHLIGHTS − Recent RC and diamond drilling at Myhree intersected several zones of high grade mineralisation. 19MYDD006 also intersected..

7.70m @ 21.38 g/t Au from 123.13m

Results include: o 3.00m @ 16.01 g/t Au from 100.50m (19MYDD006)

7.70m @ 21.38 g/t Au from 123.13m (19MYDD006)

4.45m @ 13.92 g/t Au from 64.55m (19MYDD007)

4.60m @ 10.98 g/t Au from 184.90m (19MYDD005)

3.24m @ 9.43 g/t Au from 192.26m (19MYDD005)

2.00m @ 13.20 g/t Au from 231m (19MYRC111)

 

[finicky]

Hi, ~$2m cash was what they had at end of Sept 2019 as reported in the Qtrly report released Oct 15, but don't forget the capital raising via a placement to Insts and Sophs announced Oct 3. This placement was for $5m before costs and didn't make it to the Sept Qtrly cash statement.

In the activities part of the report on Oct 15 they said this:

Financial

• Completed strongly supported $5M capital raising subsequent to end of quarter.

• Cash reserves of ~$6.7M to allow completion of Feasibility Study and accelerated drilling and Resource growth activities.

I'm afraid I feel the drilling results announcement was to goose the market as only one of the holes was an extension, the rest were infill holes to progress towards the March 2020 resource update. Extension hole was a good one admittedly but I think doubts will continue till Jan 30 and after when there are those ~25m shares to be added to the float and 10,926,500 options @20c that become exercisable. I'm skeptical the the s.p will hold till this is out of the way.

 

[barney]

Hi, ~$2m cash was what they had at end of Sept 2019 as reported in the Qtrly report released Oct 15, but don't forget the capital raising via a placement to Insts and Sophs announced Oct 3. This placement was for $5m before costs and didn't make it to the Sept Qtrly cash statement.

Ah, right thanks Finicky ….. that makes things a whole lot better.

Up 8% today and making the recent dip around 30 cents look like a bona fide double bottom.

Good results/Cash in hand … off to the races perhaps Good luck with it.

 

[finicky]

In the announcement today (see below) the directors are committing to a further escrow period of 1 year for their freebies, but that means that roughly half the escrowed shares and half the 20c unlisted options could still come onto the market on or after Jan 30. Guessing most of those are held by vendors of tenements, maybe they'll see more value in holding, but easy to see a scenario where some will sell shares to exercise the options - I don't know, but I don't take much reassurance from directors who rewarded themselves so richly from the outset of the company.

It's still a hold for me of course, but if buying I will be waiting for clarification till well after Jan 30. It's roughly 12.5 million shares and 8 million well in the money options that are held by non director entities and are not nailed down from Jan 30 onwards. That's heaps for a low share issuance company with low trading volume.

January 28
Voluntary Restrictions Extended Over Director Related Holdings

The Board of Black Cat Syndicate Limited (“Black Cat”) is pleased to advise that all directors and
their related parties have entered into further voluntary restriction deeds with Black Cat. This will
extend the current trading restrictions over director related shares and options for an additional 12
months to 30 January 2021. These restrictions may be lifted in the event of a change in control
transaction.
On 30 January 2020, a total of 12,028,890 ordinary fully paid shares and 6,691,112 options
exercisable at $0.20 each and expiring 25 January 2023, held by directors and/or their related parties
were to be released from ASX escrow and voluntary restrictions (refer ASX announcement 13
January 2020).
The new voluntary restriction deeds are effective from the date of expiry of the existing arrangements
and extend to 30 January 2021. The extended restrictions apply to all of the director related shares
and options being released on 30 January 2020.

All Data Weekly

 

[finicky]

BC8 @ 37.5c weekly close, Fri Jan 21.

Looks like I might be wrong and buyers mopped up all extra supply from shares and options recently out of escrow. Look at the high positive volume last week (closed higher than prior week) and all that resulted was a meek indecisive doji candle. My interpretation is 4 weeks of consolidation and preparing to move higher?

Held
Disinclined to accumulate more

All Data Weekly

 

[finicky]

Black Cat (BC8) has now recovered more than it lost in the March share price rout. Could've picked up more between 20-25c.

On May they released an announcement that's a bit obscure to me but they investigated with RC drilling some high grade vein sets running perpendicular to the main north south mineralised trend of Myhree. This got them results which I think they're saying is outside the current conceptualized pit shell?
Anyway, these results were in an area not drilled before and contiguous with the prior drilled out zone.

Check out the grades which are near surface and mostly "ended in mineralisation"

Results include (not an indication of true width):

o 28m @ 6.59 g/t Au from 5m (20MYRC020), hole ended in mineralisation;
o 3m @ 41.95 g/t Au from 41m (20MYRC014);
o 9m @ 10.11 g/t Au from 24m (20MYRC016), hole ended in mineralisation;
o 9m @ 7.84 g/t Au from 24m (20MYRC018), hole ended in mineralisation;
o 13m @ 4.6 g/t Au from 20m (20MYRC021), hole ended in mineralisation; and
o 7m @ 3.76 g/t Au from 26m (20MYRC019), hole ended in mineralisation.

BC8 1Year Dly

 

[finicky]

A director appointment announced today that adds to my suspicion that the BC8 board will just keep developing and defining the Bulong gold field till the asset or BC8 itself becomes compellingly ripe for acquisition by a major, à la Alt Resources (ARS) recently. Black Cat most likely won't go on for years having the Bulong field contract mined and toll treated. It's just too conveniently close to some big operators (e.g NST's Kanowna Belle) and Kalgoorlie.

Tony Polglase is an experienced mine developer with qualifications in engineering and metallurgy.

"Most recently, Tony Polglase was a driving force behind Avanco Resources Ltd (“Avanco”).
Avanco successfully transitioned from explorer to producer after discovering Antas, one of the world’s highest grade copper deposits in Brazil. Under Tony’s guidance, Avanco went on to develop Antas on-time and on-budget. Avanco was acquired in 2018 by OZ Minerals Ltd for ~$430m."

Weekly

 

[finicky]

Bahaha
12.41
Request for Trading Halt – Black Cat Syndicate Limited (BC8)
In accordance with Listing Rule 17.1, Black Cat Syndicate Limited (“Black Cat”) requests that an
immediate trading halt be placed on its securities pending the release of an announcement
regarding a material transaction involving a potential acquisition.
Black Cat anticipates that the trading halt will be lifted on or before market open on Tuesday, 26
May 2020 by provision of an announcement to ASX regarding the material transaction.