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.
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.
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.