coyote plant, page-38

Thanks all for the welcome. Firstly, those of you that have seen my posts on TAM know that I am a big fan of ABU and strongly advocate for TAM to emulate ABU. Having said that ABU are not miners or producers yet and that adds a substantial level of complexity to any company. In military parlance, the best laid plans never survive contact with the enemy and anyone that has ever operated a mine will tell you that mining/processing and exploration are vastly different undertakings to exploration. ABU can learn a lot from TAM and ABU have had a significant amount of assistance from TAM on all levels to date. Not least of which has been ongoing logistics based out of Coyote. TAM have been an open book for ABM on metallurgy and geology in the past. Things have soured a bit lately over the toll treatment but generally both organisations remain close.

TAM are serious squared away operators. They are very lean and mean and they do a lot with very little. Coyote operates at its operational capacity - not 100% - that is impossible with any plant. It is dependent on head grade, mining program, maintenance schedules and stock pile availability. Coyote is run efficiently at its operational capacity and I would strongly challenge anyone to do better. Friggin with any plant is best done with small perturbations and changing ore inputs must be closely measured and managed to keep things in equilibrium and running efficiently so toll treating cant be just turned on and off. So lets put this away - there is no real capacity at Coyote unless the conditions I mentioned before are met.

As for Coyote having a 6 month life, please read carefully the TAM announcements and the recent data on Kavanagh. With the capacity constraints of the Coyote plant, the mine has an indefinite life based on current resources and new underground and surface drilling so rule it out of your thinking. Coyote is the geological and metallurgical analogue of Old Pirate so you should not be surprised by the potential still left in it. ABU have done a great job of mapping and drilling Old Pirage however TAM just dug up coyote instead of drilling it even with gold at $1000 per ounce.

Nabaru01 is on the right track. TAM and ABU are both good plays in the most undeveloped gold province of Australia. They both have in 3M+ in ground ounces at $60 which is greatly under valued. TAM as a producer is cheap right now, and they are drilling like crazy for ounces at ground rush and coyote (and bald hill/osprey). TAM need money to upgrade central Tanami and keep drilling out ounces. A capital raising will have a lot less impact on TAM than ABU because they are already producing and I expect TAM are planning to raise capital soon and this is keeping their share price down. ABU will suffer more from a CR so I can appreciate holders reluctance when I say that this is inevitable, however it is the only way to take the company forward. ABU need to forget about any talk of gravity only plant and plan for either heap leach CIP at $50M+or ball mill and cip at $100M+. Gravity crush only is unheard of in main stream commercial gold processing - you are just leaving money on the table - once you have water and a camp and you have dug it up and crushed it and wet it, then it is a simple (though capital intensive) process to recover the remaining gold. The payback period is probably less than 3 years so it is a no-brainer.

The other thing that ABU will have to do at soon is consolidate its shares if it going to raise real capital for a real plant. There are way too many shares on issue to be taken seriously. That is the unfortunate fact that cannot be avoided and you can expect a CR at 10 for 1 consolidation so that instos will take a placement. We can't fear this or argue against it - it is one of reasons that ABU sits at $60 per ounce right now. The window for capital is opening now at $2000 per ounce and I would be extremely surprised if ABU were not working on a consolidation and CR plan right now. It will be in the long term interests of the company and shareholders. Short term pain for long term gain because institutions will avoid the register until this sorted.