Bullion Monarch Mining scores record revenue
BULM recorded its best revenue year ever, with record revenue of $5,214,603 in fiscal 2010. This increase of $1,414,713 from 2009 is due to increased production and an increase in the average price of gold.
Net income totaled $1,019,906 in the fiscal year ended April 30, compared to $1,766,949 for the year ended April 30, 2009.
Net income decreased during the year largely due to a $500,000 buy down relating to capping attorney contingency pay on the Newmont and Barrick litigation and an increase in legal/accounting expenses relating to a one-time succession accounting revision.
Due to increased revenue, Bullion was able to accelerate exploration payment on its Brazil properties, which involves a $2 million commitment. Bullion has the right to convert its 33.3% interest to a 4.5% Net Smelter Royalty (NSR). Also, during the fiscal year ended April 30, total assets increased to $5,033,169, up from $3,993,026 on April 30, 2009.
EnShale Energy, a subsidiary, has completed the international patent application process that will protect its proprietary method of producing oil from an abundant, high kerogen content rock know as oil shale. EnShale filed patents in Canada, Australia, China, Brazil and Estonia, which are known to have large deposits of oil shale.
The next technological milestone for the EnShale pilot plant will be to achieve a sustained processing run as opposed to the current, less efficient, batch processing.
Editor’s Note
Since we recommended BULM June 2, the stock price has dropped. We credit the drop to two factors: 1) There has been a skid in the per ounce price of gold; 2) There may be some dissatisfaction that the net income this year was lower than in 2009.
However, long term the company is involved in three explosive situations:
Brazil: The company is stepping up its investment in a gold mine there, which should eventually produce a strong royalty stream.
Shale: Unlike some other shale extraction methods, the Bullion Monarch method does not involve water and the resultant contamination of that water. Plus, most important, if the EnShale process produces oil under $30 a barrel, that will put it at a great competitive advantage.
Litigation: As we noted in our June 2 write-up, lawyers pursuing this case are so confident of winning that they are handling it on a contingency basis.
Although the company does now receive royalties from Newmont Mining, there are other Newmont properties that contractually should be producing additional royalties. If the court rules in favor of BULM, the accumulated amount will be considerable and the lawyers will receive a percentage of that.
However, due to a misunderstanding, the attorneys wanted a percentage of future royalties. But, the payment to them as reported in the earnings report is in lieu of them getting a future cut.