abu at 40 cents - quickly a la adn x2, page-62

"ok, but ABU have a diluted share base. Don't you think they will -recap and then you all get your butts burnt."

Why do they need to do a "recap" and even if they did, how does this change the economics of the mine, the projected cash flows, the market cap or the valuation of the company?
It makes no difference in any way. Just a waste of time and money and has no use except in the minds of traders. A good company does not need traders. It's better off attracting long term investors. A recap, if it were to happen, would not cause us to get our butts burnt. That would only occur if the mine underperformed badly or if the gold price collapsed to the point where most major mines would be forced to close. Others that perform badly after recaps do so because of their fundamentals deteriorating not because of the recap. I have been watching every piece of news over the last year and a half and gone back over years of announcements in my research. I have invested predominantly in gold stocks for 13 years. I think this mine is more likely to provide us with more positive surprises than negative. Positive surprises last year included the excellent metallurgical recoveries (to 97%) from simple low cost gravity recovery. The very high grades from that met work (143g/t and 43g/t) from two separate 100kg samples that were meant to be representative of the resource. The very low cost capex estimate in the scoping study. The even lower capex guidance since then. The extremely high grade GH discovery with 50,000oz from surface at 45g/t. The excellent deeper drill results from the WL with high grade wide widths and increasing in width and grade with depth. This ore body has thrown up plenty of positive surprises. The odds favour that to continue.

"I am interested to see why you all think ABU is so good regardless of grades?"
Regardless of grades? How can you ignore the grades? How many other companies do you know of that have these grades from surface suitable for open pit mining with such strong recoveries from a very low cost plant?
Regardless of grades? We like it BECAUSE of the very high grade, easily accessible, low cost to recover gold. Simple.

"Their leases are in the Tanami and costs will be high same as TAM and Granites?"
That is not a logical conclusion. Same region yes but different deposit, different ore different grade, different processing, high grade from surface so no up front mine development costs, much cheaper capital costs, much cheaper to expand production and will be much lower operating costs.

As for getting our butts burnt, what percentage of explorers or even producers are only around 20-30% below their average 2012 price? Most would be more like 80-90% down for explorers and 70-80% for producers. I scaled into ABU gradually over a few months from May 2012 after the jorc was released for an average entry price of 4.3c. It's now 3.6c or down only 16% on that average price. I always buy trading parcels on the larger sell-offs and sell those into strength. My average price adjusted for trades is well below 3.6c. My butt does not feel burnt and I see good profits ahead. Very few other gold companies would have left me in this position, but in 2012 there were very few where I could see strong upside without a continuing uptrend in gold. Instead we got much lower gold prices and while most have crashed, ABU has outperformed extremely well.