Investors love investment stories about mining companies being in the right place at the right time. They also love investment stories about mining companies that build on past successes to create brilliant opportunities for the future.

Bullion Monarch Mining has successfully done both and is an interesting investment story for investors who are looking to add an experienced, diversified, compelling mining company to their portfolio.

We spoke to Rob Morris of Bullion Monarch. Rob is the third generation of Morrises at Bullion Monarch. "My grandfather started the company, my father is now the CEO, and I've worked for the company for about 6 years". Robert Morris started the company in 1948 as M.M. & S Exploration. They merged with Bullion and today operate as Bullion Monarch Mining, with Don Morris Jr. at the helm.

 
Rob Morris of Bullion Monarch

Bullion Monarch has always been interested in finding highly valuable deposits of in-demand minerals, including gold, silver, and oil. But it's their compelling business model that has made them such an interesting investment for many: "We are a gold royalty company. My grandfather and father pioneered the Carlin Trend and brought in some of the other companies like Newmont into the area and we still receive royalties from those companies today."

The Carlin Trend project was the first innovative project they embarked on and they had the foresight to understand that there was gold in the area, even though it wasn't visible to the naked eye. They were able to extract the gold and that's what brought Newmont Mining into the picture.

That leverage and foresight has been good news for their business, earning them millions of dollars per year in royalties. "We're debt free and [the royalties] allow us to self-finance all of our projects," says Morris. "It's a different model than a lot of the companies out there who are raising money and have a burn rate and are hoping to hit something with the amount of money they have. We have a cash flow coming in so we can select the best projects and do it all out of our own cash flow."

"We're always looking at acquisitions and early stage development properties. We've just bought a third interest in two mines in Brazil… we're funding a drill program which should be done in March or April of this year. We were really excited about the preliminary results of the geology."

Gold isn't the only thing they've been busy with. Oil is big business but geopolitical concerns about US dependence on oil are prompting exploration into alternatives to traditional oil extraction, and oil shale is one of those alternatives.

Bullion Monarch owns a subsidiary called EnShale Inc. which is looking at oil in new ways: "Oil is tied up in shale rock. We've developed and patented a process to extract the oil from the shale. We're in the stage of research and development to discover how to extract oil from shale most profitably. All the science and technology tells us that we can extract oil from shale for about $30/barrel. We have 667 million barrels of oil tied up on our land… If we can successfully extract this oil, like we think we can, at the prices we think we can, it could be a very big project for us."

Along with the projects already mentioned – Carlin Trend, the Brazil mines, and EnShale – they have several other projects on the go, too:

Their Leeville/East Ore Mine in Eastern Nevada is the mine on which they are receiving an annual royalty from Newmont. Their North Pipeline Mine in North Eastern Nevada is in one of the top gold production areas in the United States. Their Maggie Creek Property lies just a few miles from Newmont's largest open pit gold quarry and, according to their website, "Bullion Management believes this property has significant potential to produce royalty revenues in the future".

Their Ophir Utah Property has five patented claims and is surrounded by Kennecott Copper mines. Both Kennecott and Freeport McMorhan have expressed interest in the mines. Gold Mountain is another project they are associated with, based in Oregon.

There are so many interesting parts to the Bullion Monarch story:

As Morris points out, they have the cash to work on projects: "We are self-financing all of our projects; we're not in the market raising money. Our revenue coming from royalties is five to six million dollars a year for the next ten years, not to mention the other projects we have in the pipeline."

Because of that cash flow, they can focus on carefully selecting the best projects. Morris says, "We've got a lot of projects going on and we're focusing on the ones that are going to make the most money quickly and we are narrowing our focus on the best ones. Because we have the cash, we do see a lot of projects, and we are interested in acquiring more properties. We talk to a lot of people and see a lot of deals, and we only select the best deals that make the most sense for us and our shareholders.

Not only do they have cash and a pipeline of projects, but they are growing up, transitioning into a more broadly accepted publicly traded company: "We plan to sell on the Toronto Stock Exchange," says Morris. "We're getting our 43-101 done and are talking to them about trading on the TSX this year."

What's in store for Bullion Monarch and for investors in 2010? "Look for some continuing news coming out of Brazil on our drill results coming pretty quickly, and for news from EnShale, too. Those should be big news."


Reference
BULLION MONARCH MINING (BULM.OB)

Contact information:
R. Don Morris, President
Bullion Monarch Mining Inc.
299 East 950 South Orem, UT 84058
(801) 426-8111
(801) 426-8555 (fax)
info@bullionmm.com