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Belo Sun Mining: 4 Different Insiders Have Purchased Shares During The Last 30 Days

July 15, 2014 | About:
maarnio

maarnio

2 followers

1 The Company

One gold mining company has seen intensive insider buying during the last 30 days. Intensive insider buying can be defined by the following three criteria:

- The stock is purchased by three or more insiders within one month.

- The stock is sold by no insiders in the month of intensive purchasing.

- At least two purchasers increase their holdings by more than 10%.

Belo Sun Mining (VNNHF) is engaged in the exploration of gold properties in Brazil.

Number of shares (March 31, 2014)

266,110,534

Number of options (March 31, 2014)

22,943,000

Fully diluted number of shares (March 31, 2014)

289,053,534

Share price

$0.21

Market cap

$55.9 million

Tickers

VNNHF,TSX:BSX

1.1 History

Belo Sun was founded on July 1, 1996. The company was formerly known as Verena Minerals and changed its name to Belo Sun Mining in June 2010.

1.2 Projects

Belo Sun’s main focus is on its advanced stage development project, the Volta Grande gold project, located in Para State, approximately 60 km southwest of the city of Altamira in northern Brazil.

nimetön.png

(Source: Investor presentation)

The Volta Grande gold project has 5.1 million ounces of gold in the measured and indicated mineral resources category.

nimetön.png

(Source: Investor presentation)

Belo Sun has also two other gold projects. The Patrocinio gold project is located in the Tapajos gold province in the Para State of northern Brazil, and the Rainbow Alexandrite project is located approximately seven hours by paved and gravel roads north of the city of Brasilia.

2 Management

The CEO Mark Eaton has over 20 years of experience in equity capital markets specializing in the resource sector. Mark Eaton has been CEO since 2010. Collectively, Belo Sun’s management team has over 130 years of industry experience.

nimetön.png

(Source: Investor presentation)

2.1 Insider Ownership

Belo Sun’s directors and executive officers own 4% of the company.

Here is a table of Belo Sun’s insider activity during the last 30 days.

Name

Title

Trade Date

Shares Purchased

Current Ownership

Increase InShares

Helio Diniz

VP

June 17-24

50,000

400,000 shares

+14.3%

Mark Eaton

CEO

July 2-3

1,050,000

8,477,500 shares

+14.1%

Michael Hoffman

VP

July 2

300,000

300,000 shares

from 0 to 300,000

Sun Valley Gold LLC

10% Owner

June 18-July 2

7,550,000

33,391,232 shares

+29.2%

There have been 8,950,000 shares purchased by insiders during the last 30 days.

Here is a table of Belo Sun’s insider activity by calendar month.

Month

Insider buying / shares

Insider selling / shares

July 2014

1,900,000

0

June 2014

7,300,000

0

May 2014

0

400,000

April 2014

981,585

0

March 2014

0

0

February 2014

0

0

January 2014

100,000

0

December 2013

288,000

0

November 2013

0

0

October 2013

714,000

0

September 2013

0

0

August 2013

0

0

July 2013

306,500

0

June 2013

0

0

May 2013

767,990

0

April 2013

0

0

March 2013

0

0

February 2013

0

0

January 2013

0

0

(Note: Option exercises are not included in the table. There have been 200,000 options exercised since January 2013.)

There have been 12,358,075 shares purchased and there have been 400,000 shares sold by insiders since January 2013. The month of June 2014 has seen the most insider buying.

2.2 Compensation

Here is a table of the management’s compensation during the last three years.

nimetön.png

(Source: Annual shareholders meeting)

The management’s compensation has followed the share price during the last three years.

sc.png

3 Financial Summary

3.1 Current Situation

Belo Sun reported the first-quarter financial results on May 13 with the following highlights:

Revenue

C$0

Net loss

C$3.2 million

Cash

C$10.1 million

Debt

C$5,204

Belo Sun doesn’t have any revenues yet.

3.2 Historical Developments

Here is a table of Belo Sun’s revenue and earnings since 2008.

Fiscal Year

2008

2009

2010

2011

2012

2013

Revenue (C$)

0

0

0

0

0

0

Net loss (C$ millions)

2.2

0.7

4.8

32.9

48.4

32.5

EPS

-0.02

-0.01

-0.04

-0.17

-0.21

-0.12

Belo Sun’s net loss peaked in 2012.

4 Shares

Here is a table of Belo Sun’s number of shares since 2008.

Year

2008

2009

2010

2011

2012

2013

Number of shares (millions)

96.6

100.3

134.4

193.1

234.6

266.0

Belo Sun’s number of shares have grown 175% since 2008, but Belo Sun’s gold resources have grown even faster.

nimetön.png

(Source: Investor presentation)

5 Outlook

Belo Sun’s primary focus is on expanding and completing a feasibility study on its Volta Grande project. Production at the Volta Grande is targeted for 2017.

nimetön.png

(Source: Investor presentation)

6 Competition

Belo Sun’s Volta Grande project is the largest developing gold project in Brazil. Volta Grande is also a relatively high grade open pit deposit.

nimetön.png

(Source: Investor presentation)

7 Risks

I believe the main risks with Belo Sun are negative earnings, no revenues, and the price of gold. Here is a graph showing Belo Sun’s sensitivity to different gold prices.

nimetön.png

(Source: Investor presentation)

Belo Sun is also a penny stock.

8 Conclusion

There have been four different insiders buying Belo Sun and there have not been any insiders selling Belo Sun during the last 30 days. All four of these insiders increased their holdings by more than 10% each.

The four insiders purchased their shares at prices ranging from $0.14 (C$0.15) to $0.22 (C$0.235). I believe Belo Sun could be a good pick below $0.22 based on the intensive insider buying. Belo Sun is currently trading below its Net Asset Value as shown in the risk section.

Disclosure: The author is long TSX:BSX.

About the author:

maarnio
I have 15 years of investing experience. I have traded stocks, commodities and Forex markets.

Rating: 0.0/5 (0 votes)

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