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ABU, ABM RESOURCES NL
melua
post Posted: Oct 29 2013, 04:09 PM
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In Reply To: chuk's post @ Oct 29 2013, 02:08 PM

I thought they would have included expected revenue from gold sales. The fact they didn't leads me to believe they will run short on cash.

"If ABU does need extra funds we have the low cost ANZ facility which should be safe now with such strong trial results."

I'm not sure you can lock that in chuk. DRM got their CBA facility and then a week later announced a capital raising as well.

 
chuk
post Posted: Oct 29 2013, 02:08 PM
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In Reply To: melua's post @ Oct 25 2013, 09:40 AM

Expected cash burn excludes expected revenue from gold sales.
It looks like average head grade from trial mining will be in excess of 15g/t. I’ll work on 16g/t for now. 95% is the average recovery indicated to date but that includes a lot of low grade ore that was put through early in the commissioning phase and the lower grade ore had lower recoveries. The higher grade ore is indicating recoveries around 96-98% so 95% should be a reasonable assumption. If we assume 16g/t diluted head grade and 95% recovery over 10,000t that is permitted for trial mining, that would suggest around 4,900oz of recovered gold. I think there will be room for error because GH might be over-represented in trial mining and overall grade may be higher than 16g/t and recoveries may average closer to 97% if average processing grade picks up from now on (I stick to 95% assumption for trial mine). The Perth mint is currently taking concentrate without penalty prior to the company optimising its final smelted product.
4900oz at spot gold of US$1355 with AUD at 95c equates to around A$7mill. Work on $6mill-7mill and post trial mine cash balance should be around $5-6mill. That alone is probably enough to get through to stage 2 commercial production which should be strongly cash flow positive.
If ABU does need extra funds we have the low cost ANZ facility which should be safe now with such strong trial results.

Why would you think a cr would be needed? What was the point of the ANZ facility?

 
melua
post Posted: Oct 25 2013, 09:40 AM
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In Reply To: melua's post @ Sep 27 2013, 09:25 AM

Cash down to $2.8M with expected burn of $3.2M this quarter. Capital raising imminent IMO.

 
melua
post Posted: Sep 27 2013, 09:25 AM
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In Reply To: melua's post @ Sep 23 2013, 11:34 PM

Looking a bit weak but as i have said, it's got a $100m market cap which is not cheap given the resource size.

 
melua
post Posted: Sep 23 2013, 11:34 PM
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In Reply To: melua's post @ Jun 21 2013, 06:16 AM

chuk you have mail.

 
melua
post Posted: Jun 21 2013, 06:16 AM
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In Reply To: melua's post @ Mar 23 2013, 09:33 PM

The very high market cap for ABU makes this stock extremely vulnerable to major downside IMO. I wouldn't touch this until we see a 1 in front of the share price.

 

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melua
post Posted: Mar 23 2013, 09:33 PM
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In Reply To: chuk's post @ Mar 7 2013, 10:14 PM

"The scoping study estimated $256mill in two years."

I don't believe those numbers.

 
chuk
post Posted: Mar 7 2013, 10:14 PM
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In Reply To: Mookie's post @ Mar 7 2013, 03:21 PM

Teranga; Grade mined in 2012 was 1.98g/t and head grade was 3.4g/t at a strip ratio of 3.9:1.
I notice reserve grade is just 1.22g/t with 1.3mill oz.
That's a much lower grade so what will profits be over the rest of the mine life?
Guidance for 2013 is already seeing a big drop to 1.4g/t mined and 2g/t head grade and strip ratio jumps to 7:1.
That's a 33% drop in head grade and a big jump in strip ratio.
I have no idea how they forecast only a small increase in cash costs.
Maybe the market doesn't believe it and that may partly explain the sharp drop in sp and the low mc?
Very low reserve grade, falling mined and head grades.
They have Gora at around 5g/t but that's only 374koz.
Mosato has 700koz but only at 1.15g/t

The last presentation also says they are currently on a tax holiday which ends in 2015 after which tax will cut into the profits. The 2012 profit had no tax.
Fair enough I have only had a brief look and may be missing something but I don't see a good comparison here to ABU with a resource from open pit with a grade above 10g/t and no African sovereign risk to worry about.

At $130mill mc I disagree that there is any blue sky at all factored in.
The first two years of production should see cash flow well above $130 mill.
The scoping study estimated $256mill in two years.
Where's the blue sky factored in?
Not a producer?
Neither was Andean and its mc went into the billions.
Is SIR a producer?
Its mc is multiples higher than $130mill and deservedly so.
Producer or not doesn't make any difference to potential mc, it is what the deposit is worth that counts.

I agree with Mookie, no comparison.


 
Mookie
post Posted: Mar 7 2013, 03:21 PM
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In Reply To: chuk's post @ Mar 7 2013, 02:42 PM

Melua

Your not really comparing apples with apples.

An Australian focussed company vs one in Senegal which is currently engaged in massively increasing taxes. Also doesn't the other company have hedging well under $1,000?

Massive political risk...

 
chuk
post Posted: Mar 7 2013, 02:42 PM
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In Reply To: melua's post @ Mar 3 2013, 06:11 PM

I expect that the cost per ounce will vary from quarter to quarter because of varying head grades.
When they mine GH at an ounce per tonne from a very shallow pit and wider mining widths, I would expect cash costs well below $500/oz.
At OP, cash costs should also be lower in the first year when strip ratios are much lower as they mine high grades starting from surface.
The $500 estimate from the scoping study was for LOM down to 100ms.
It was based on recoveries of 85% and potential has now been demonstrated for recoveries well above 90% (tests show up to 97%).
Also the resource grade has increased strongly (up 27% overall) since the scoping study.
That might be partially offset by a lower throughput rate though compared to the scoping study assumption.
If it was close to accurate at $500 on 11.5g/t head grade then GH pit should have much lower than $500 total cash cost.

The trial mine will reveal more info including achieved head grades and recoveries.
The average vein grade is 25g/t so if they can keep mining dilution down, the head grades used in the scoping study might prove conservative.
Regis is not that far off $500 at around $600 inc royalty in Australia.
They have economies of scale but they also have much lower grades. At around 1.4-1.5g/t at Moolart Well, head grades are only a bit better than 10% of the head grades ABU expect.

I'm not familiar with Teranga gold so have no idea why its mc is where it is.
It was nearly double the current price just months ago.
Perhaps it will be back up above $500mill mc again in a few months.

 
 


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