Warren Buffett’s famous No.1 rule is “never lose money”. Clearly this is sage advice, however, I have always tempered this rule with “focus on things that will make you money”. I think Bellevue Gold Ltd (ASX: BGL) shares are one of the ASX companies likely to make you money.
And I’m happy to have a small stake in the company.
I think Bellevue shares are a great growth opportunity in the gold mining sector as well as one of the best opportunities in mining shares.
Why Bellevue shares?
The company recently announced it has intersected high-grade gold 7.4km north of its Bellevue Gold Project in WA. This is in addition to the already estimated 2.2 Moz gold resources at an average grade of 11.3 grams per tonne. The mine is a proven, gold-rich resource that has been mined for over 100 years.
While 11 grams in a tonne may sound small, it is very large in relation to the grade of many mining sites. It also has existing infrastructure and has reserves at lower depths than comparable gold operations in Australia. All of these factors point to a rich operation with very low operating costs.
A combination of factors that make it likely to earn you money.
Over the past decade, I profited from investing in Northern Star Resources Ltd (ASX: NST) as it doubled its share price again and again. I have been most impressed that Bellevue has attracted significant talent from Northern Star -people who have already taken a small gold mining company into a major gold company at a global level.
These include former Northern Star Mine Manager, Mr Craig Jones as the COO of Bellevue. As well as Mr Luke Gleeson as Head of Corporate Development.
Why Gold
Good gold mining companies regularly return good capital growth to their investors. This happens when the gold price is up, down, or flat. Right now the gold price is at historically high levels. When equities are falling or flat the shares in gold miners tend to rise.
Added to this is the impact of infinite quantitative easing, in particular, in the US but also in Australia to a lesser extent. In summary, this injects large amounts of liquidity into the markets. The combination of higher amounts of cash, low-interest rates and escalating uncertainty is likely to hold gold prices high.
Foolish takeaway
Bellevue is one of the country’s richest gold resources at a high grade and I think it has a strong chance to make you money. A combination of factors is likely to make this a low-cost operation at a time when the gold price is high. Even if the gold price falls this deposit is still very profitable.
Want to discover more shares that could make you money? Read on…
One trick to potentially generating life-changing wealth from the stock market is to buy early-stage growth companies when their share prices still look dirt cheap.
Motley Fool’s resident tech stock expert Dr. Anirban Mahanti has identified 5 stocks he thinks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
More reading
- 5 ASX shares that would’ve made you a fortune in 5 years
- Gold mining shares – these are the facts and myths
- ASX winners and losers from last week
- 5 things to watch on the ASX 200 on Monday
- Keep a watch on these 3 ASX trends next week
Motley Fool contributor Daryl Mather owns shares of Bellevue Gold Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post Why I think Bellevue shares are ‘gold’ for your portfolio appeared first on Motley Fool Australia.
from Motley Fool Australia https://ift.tt/3hANeF9
Leave a Reply