higher low?, page-31

Most mid caps are up at least 10-15%; PRU up 27%, SBM 22%, EVN 22%, KCN up 14%, MML up 16%.
Even NCM is up 11.5%. When’s the last time we saw that?

Let’s go base case for ABU; Forget about higher prices for gold or lower AUD for now, and forget about 300,000tpa for stage 3 and forget about exploration upside for now.
Assume spot prices and just a smaller upgrade to the trial plant to 200,000tpa, 10g/t and 92% recoveries for around 60,000oz per year.
I also assume $21mill for admin, sustaining capex (minimal for such a small plant) and exploration. $480 cash costs before royalties ($383 in scoping study).
I get a profit of $25mill per year for a PE of just 4. That’s for a high margin, low risk open pit operation with no debt and little commodity price risk. Far too low so once everything is proven through the trial mine, we should expect a rapid re-rate.
At that rate there would be around 4-5 years of open pit mining and another 4-5years to follow with underground.
Both could easily be extended through exploration.
Profits would be much higher at 300,000tpa; $46mill for a PE of 2.2. Profits would also likely be higher in year 1 with GH likely to get grade up well beyond 10g/t.
Who needs a higher gold price? Many producers do but not ABU.