The Daily Pulse of Bursa Malaysia

Bahvest trends higher as gold prices hit record high

Publish date: Thu, 23 May 2024, 09:12 AM
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Gold prices have been phenomenal, touching a new record of US$2,450 an ounce on May 20.

This was on the back of increasing optimism over the Federal Reserve’s monetary policy and rising geopolitical tensions, paving the way for another rally in the metal.

For investors who think it is risky to bet on gold since it has reached its record high, there is another option to ride on the good upturn.

Bahvest Resources Bhd appears to be an alternative to investing in gold stands to benefit from the recent surge in global gold price.

In 1QFY24, the company produced over 150kg of gold but sold only 65.87kg, leaving a surplus inventory that could be sold at higher prices amid the current gold price rally.

With increased mining production and the continuing upward trend in gold prices, Bahvest is set to capitalise on these favourable market conditions.

Recognising Bahvest’s potential, it is poised for a bullish breakout targeting to surpass resistance level of 61 sen.

It said in the event it breaks above 61 sen, this will improve buying interests and lift the stock towards the subsequent level of 63 sen, followed by 70 sen.

Just a year ago, it was trading at a low of 14 sen and now it has reached a high of 62 sen.

Much like other gold-linked counters, Bahvest’s share price has been on the rise in recent weeks — surging 44.05% from March 20’s close of 42 sen.

Excitingly, Bahvest’s unit has received approval from the federal government's mining regulator for its gold mining operations in Tawau, Sabah.

Bahvest said its wholly owned Wullersdorf Resources Sdn Bhd received the approval from the Department of Mineral and Geoscience Malaysia (JMG) for the operational mining scheme in accordance with Section 10 of the Mineral Development Act 1994 (MDA).

With the above approval, Wullersdorf is now operating under both the MDA, in addition to the previous approval from the Sabah state government under Section 18(d) of the Sabah Mining Ordinance 1960.

JMG is the mineral development and mining regulator, under the Ministry of Natural Resources, Environment and Climate Change, responsible for administering and enforcing the MDA. Wullersdorf, meanwhile, is Bahvest's primary operating subsidiary. The group's entire revenue for its financial year 2023 was derived from Wullersdorf's mining operations.

Bahvest posted a net profit of RM11.09 million in the first quarter ended Dec 31, 2023 (1QFY2024), on the back of revenue of RM19.85 million, driven by the sale of 65.87kg of gold and 92.36kg of silver.

The mining company should have more legs to its rally as gold prices sustain at high levels or moves higher.

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