In any business, there is little substitute for experience and planning. Having the foresight to see an opportunity and plan for where it may lead is a skill learned through very hard experience. Often, the benefits of this ability are not evident for quite some time – something today’s “next quarter “investors fail to understand – and patience must be practiced. But when the future arrives, profit will be waiting in massive abundance.
Bullion Monarch Mining Inc., a natural resources exploration and development company, engages in the exploration, development and extraction of gold, silver and oil shale. Founded in 1948, the company operates primarily in Utah and Nevada on a debt-free basis.
The company was one of the first mining concerns to recognize value in the Nevada Carlin Trend gold find – now rated the second most valuable gold deposit in the world. As such, management was able to execute a long-term strategy which positioned the company to become a debt-free, long-term player in the mining world.
Perhaps the company’s most strategic and profitable action was its 1979 deal with Newmont Mining. In this agreement, the company agreed to cease operations at its leases adjacent to the Carlin Trend (and well-defined leases surrounding the trend) in exchange for 1% of net-milled revenue generated from the Trend by Newmont. This deal has effectively allowed the company to advance almost any venture it chooses without incurring debt or dilution of shares, if it so chooses. Diligence, however, has been the price of this agreement, with the company needing to follow a litigious path in making sure that Newmont pays full value to its agreement. The company has similar agreements (albeit with different conditions) with Newmont mining (3% net mill) and American Barrick (4%) at nearby properties that are not in litigation. It also has several gold and silver development projects underway.
The future of the company is currently benefiting from this agreement as well. August 26, 2008 has found the company choosing to advance its oil shale demonstration plant, through its subsidiary EnShale Inc., with revenues derived from this agreement. If successful, this plan is designed to make the company a leading oil shale producer, while not incurring any debt or dilution of shares. As the Carlin Trend is expected to remain productive for some time to come, and gold prices are likely to remain well above where the company began, the future appears quite bright for the company. Oil shale is certainly a long term investment, but the company is well versed in this type of business plan. Planning for the long term has always been the credo for Bullion Monarch, and it will likely continue to be so as its royalties continue to pan out.
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