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, Financial) 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.
(Source: Investor presentation)
The Volta Grande gold project has 5.1 million ounces of gold in the measured and indicated mineral resources category.
(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.
(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.
(Source: Annual shareholders meeting)
The management’s compensation has followed the share price during the last three years.
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.
(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.
(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.
(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.
(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.
