$BAHVEST / 0098 (BAHVEST RESOURCES BERHAD) sharing from discussion group. Looks interesting.
*Bahvest* (0098) - *Gold rush 2.0 with expansion through new collaboration*
*Expansion in new mining site*
Bahvest announced on 22 Oct that it had entered into an agreement with Aurelius for exploration and mining work in a Tawau, Sabah site spanning 18k hectares.
Under the agreement, any profits will be shared by the two parties – 70% for Bahvest, 30% for Aurelius.
Notably, Datuk Lee Vui Han who is the director of Aurelius is a major shareholder of Bahvest holding 8.14% stake.
*The coast is clear for Bahvest*
Bahvest had previously experienced hiccups in its operations where mining work was halted during 1Q-3QFY24 (FYE: Sep) due to stop work order resulting from a change of management as well as machines breakdown as it reached end of life span.
Both of these issues are now resolved. Production had resumed since Apr 2024 after receiving approval from the authority to resume work, while the old machines were replaced.
4QFY24 will see a full quarter contribution with the group production running in full swing. This quarter results will give a glimpse of the group’s full revenue potential at current capacity.
*New lease of life*
With the recent warrants conversion, the group managed to raise more than RM250m of proceeds.
With this proceeds, the group plans to invest in its expansion, including potential investment in refineries and acquiring smaller mining companies.
With the warrants conversion exercise completed, the group is also considering to declare its first dividend, allowing warrants holders who converted their warrants to participate and receive this dividend.
In 2025, the group also targets to transfer to main market, enhancing its investability.
*The gold rush*
Gold continues its relentless rally with price constantly breaking record high, most recently closing above USD2,760/ounce.
Despite geopolitical tensions de-escalating, gold continues its rally, indicating that there are other drivers for the gold rally.
Most notably, the BRICS nations continue to drive strategic efforts to reduce reliance on USD and diversify their reserves.
Consequently central banks are accumulating gold as part of a dedollarization strategy, supporting the demand for gold.
*A new golden era begins*
The group has multi-catalysts including:
(i) change in management enhancing governance and production;
(ii) production resumed in full-swing following several quarters of disruptions;
(iii) expansion through current collaboration with Aurelius and more in pipeline;
(iv) potential first dividend declaration;
(v) planned transfer to main market; and finally most importantly
(vi) the relentless gold price rally.
The stocks offers a good proxy to the gold price rally.
Given the upcoming election, geopolitical tensions that bring volatility, risks and unpredictability for the equity market, the stock provides a good hedge and diversification for portfolio given its low beta and correlation with equity market.