BMG Resources Ltd (ASX:BMG)

Investment Memo:

BMG Resources Ltd (ASX:BMG)

- LIVE

Opened: 03-Feb-2026

Shares Held at Open: 29,123,809

What does BMG do?

BMG Resources (ASX:BMG) owns 100% of the 518k ounce, Abercromby gold project in WA - the project sits within trucking distance to two existing mills and on mining leases.

BMG also owns the Bullabulling project, next door to Minerals 260’s 4.5M ounce gold deposit.

What is the macro theme?

Gold is a precious metal often used as a hedge against inflation, which remains persistently high, and the gold price is trading near all-time highs at the time of this memo.

We think juniors with existing resources, pathways to production and scope to grow their resources will be the next batch of gold stocks to run in this gold price environment.

We think BMG is well-positioned to benefit from these macro tailwinds.

Why did we invest in BMG?

BMG has an existing 518K ounce gold resource

We think the current resource underpins BMG’s current market cap. With some drilling, we think BMG could grow the resource to over 1M ounces (which is in line with management incentives). We think the current resource more than underpins BMG’s current market cap at ~$25M.

Blue sky exploration upside on the existing resource

BMG’s theory is that its existing resource could be a part of a “Never Never” style ductile gold structure. The 2.1M ounce Never Never deposit discovered by Spartan Resources was taken over for ~$2.5BN only 2.5 years after discovery.

Existing resource sits on a granted Mining Lease

BMG’s 518k ounce resource sits on granted Mining Leases. BMG also has an MoU in place with a nearby plant operator, so technically BMG could start mining its existing resource fairly quickly.

Nearby plant operator is planning to complete a $400M relisting on the ASX

The plant operator BMG has an MoU in place with (Wiluna Mining) is planning to raise $200-300M and relist on the ASX. We think that cash and more market interest in the region will be good for BMG.

BMG’s other project is next door to a 4.5M ounce gold deposit

BMG also holds ground next door to Minerals 260’s 4.5M ounce gold deposit in WA. Minerals 260 (in its own words) thinks its deposit extends west - which is directly where BMG’s ground sits. BMG is yet to drill this ground.

We are backing John Prineas from St George Mining here

We Invested in John’s other company St George Mining (ASX: SGQ), and it has been one of our best performers for 2025, up 560% from our Initial Entry Price. (past performance is not an indicator of future performance)

The ASX likes WA gold companies

Australian investors understand WA gold and many have made money from company-making discoveries in WA. This makes it easier for the market to digest a new WA gold stock, and when the market gets behind it share prices can really start to move aggressively.

We are Investing alongside Tribeca Investment Partners

We have had success Investing alongside Tribeca with Locksley Resources up 84% and Rapid Critical Metals up 89% from our Initial Entry Price. (past performance is not an indicator of future performance)

Gold price is trading near its all time highs

Gold recently hit new all time highs of ~US$5,600 per ounce and is now trading at ~US$4,655 per ounce (~A$6,700 per ounce) which is well above the typical all in costs to produce gold. We think junior developers with existing resources could run in this gold price environment.

New experienced CEO appointed to drive the business forward

Ben Pollard was just appointed CEO of BMG. Ben has more than 25 years experience in exploration and mining in WA, bringing an extensive network of industry contacts. Ben has been exploration manager at BMG since 2020 so will be very familiar with these assets and be ready to hit the ground running as CEO. We like Ben’s experience in this part of the world having worked for companies like and delivered value for shareholders of small companies .

What do we expect BMG to deliver?

Objective #1: Drill out and upgrade Abercromby’s resource

We want to see BMG drill out and upgrade the 518k ounce gold resource at its Abercromby project.

We are especially interested in seeing BMG drill test its “Never Never” exploration model - this is where BMG thinks its project could sit on similar structures to the major discovery Spartan Resources made, also in WA, and eventually got taken over for ~$2.5BN.

Milestones

not done Drilling starts

not done Drilling results

not done Resource upgraded

Objective #2: Scoping study for Abercromby project

We want to see BMG put together a scoping study for its Abercromby project. We are especially interested in seeing how the project could look from an economic perspective in a toll treatment scenario.

Milestones

not done Scoping study results

Objective #3: Drilling Bullabulling project (next to MI6)

We want to see BMG drill out its Bullabulling project - next door to Minerals 260’s 4.5M ounce gold deposit. We want to see BMG test MI6’s interpreted extensions that run into BMG’s ground.

Milestones

not done Geophysics

not done Drilling starts

not done Drilling results

What could go wrong?

Exploration risk

BMG’s exploration upside is based on geological theories, specifically that the Abercromby resource hosts a "Never Never" style high-grade system at depth, and that the Minerals 260 deposit extends into BMG’s Bullabulling ground. These theories have not yet been proven by BMG’s own drilling. If upcoming drill programs fail to validate these models, the market could re-rate the stock lower.

BMG: WA gold drilling started. Gold price rises after global chaos ensues? [02-Mar-2026]

Commodity price risk

The performance of commodity stocks are often closely linked to the value of the underlying commodities they are seeking to extract. Gold prices are trading near all time highs, any volatility or sustained drop in gold prices could hurt BMG’s share price.

Market risk

Broader market sentiment could deteriorate, and shares as an investment class trade lower, taking BMG’s share price with it. Alternatively, there could be further sector specific pain ahead where junior explorers suffer a lot more than the broader market.

Funding risk/dilution risk

As a pre-revenue small cap company, BMG is reliant on capital markets to advance its projects. If something negative happens at a macro or company level, BMG could struggle to access capital on favourable terms.

These capital raises may take place at a discount, and result in the issuance of new shares which incur dilution to existing shareholders.

Delay/Development risk

BMG has loosely committed to a toll treatment development model for its gold project in WA with the signing of a non-binding MOU with a nearby mill owner. There is no guarantee that the mill owners commit to processing BMG ore. Any delays or cancelled toll treatment deals may impact near term cashflow potential and BMG’s share price.

Other risks

Like any small cap exploration and development company, BMG carries significant risk, here we aim to identify a few more risks.

The company’s near term development strategy relies heavily on a non-binding MoU with Wiluna Mining for toll treatment. There is no guarantee that this MoU will convert into a binding commercial agreement, or that Wiluna’s mill will be available when BMG is ready to mine. If Wiluna prioritises its own ore, BMG may be left without a nearby processing solution.

As a pre-revenue company, BMG is reliant on capital markets to fund its aggressive exploration and scoping studies. While the recent $2.5M raise provides runway, any future capital raisings could dilute existing shareholders, especially if conducted at a discount.

Finally, BMG is highly leveraged to the gold price, which is currently trading near all-time highs. Any correction in the gold price could disproportionately affect the valuation of junior developers like BMG, particularly those with higher-cost or lower-grade ounces.

Investors should consider these risks carefully and seek professional advice tailored to their personal circumstances before investing.

What is our investment plan?

We are Invested in bmg to see it progress its project into development.

Our plan is to hold the majority of our position in BMG for 3 to 5 years which we hope is enough time to see BMG to move towards development (see “our long term bet” above).

After 12 months we will apply our standard de-risking strategy.

We may also look to sell up to 20% of our holding if the company delivers on one or more of our Investment Memo objectives and/or the share price materially re-rates.

Any sell downs will be in accordance with our trading and hold policy disclosure.

Disclosure: Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 29,123,809 BMG Shares and the Company’s staff own 10,000,000 BMG Shares at the time of publishing this Investment Memo. The Company has been engaged by BMG to share our commentary on the progress of our Investment in BMG over time. This information is general in nature about a speculative investment and does not constitute personal advice. It does not consider your objectives, financial situation, or needs. Any forward-looking statements are uncertain and not a guaranteed outcome.