abu fundamentals?, page-6

I've been doing a bit more research on expected costs, its hard to get a reading on what they will be except for the fact that they will be low.

On May 15 2012 ABM released the results of their initial scoping study for stage 1 mining which gave an estimated C1 cost of $383/oz with total sustaining costs of $511/oz. This was based on the first stage open pit with a then estimated resource of 308 million oz's. As far as I can find the company has not released an updated estimate for either value since then, however the resource has only gotten better since then so it could be even lower. They also stopped quoting this figure in presentations once they commenced trial mining, so we can probably assume it is not accurate.

Canacord has some research reports out for ABM which can be found on the ABM website. From their latest report released 2 December 2013 they are modelling C1 costs of $617/oz with total sustaining costs of $773 for FY2014. This is significantly above the scoping study estimate, and it would be surprising to me if the C1 cost was quite this high just comparing it to other high grade open pit mines especially when you consider the gold is at surface.

Nonetheless, they are forecasting NPAT of $32.6 million for FY2015 (first full year of production) based on this model, and $64.8 for FY2016 which would give us a P/E of 1.2 on the current share price.

I think I'm going to buy some more shares tomorrow...