ann: quarterly activities report out, page-29

“Why then is the market pricing this at 3.9 cents?
Why is the price less than half of what it was 14 months ago?
Is the market wrong?”

Why is the price half of what it was 14 months ago?
Simple, it halved when most others small explorers halved as well (gold or other resources explorers as well), and most of that fall occurred before OP even had a jorc resource so the fall in line with peers and producers was easily explainable.
You could argue it was overpriced at 8c considering it was difficult to put a value on OP prior to its jorc.
Why has ABU not bounced back on news?
Easy; those other peers kept falling.
There are plenty that halved with ABU, then halved again, and then halved again!
They have dropped 75% further while ABU is flat.
There are a very few that rose strongly against the trend (SIR and SYR) off very low mc’s although no gold stocks that I can think of with gains anything like that. In general even many of the producers have fallen further while ABU has held ground over the last 6 months.
Take a look at those I have mentioned before; NMG, AZM, ELM, GMR, NTU, HAS, MNC, ARD, USA, STB, AYN, the list seems endless. All fell much more than ABU and that creates a drag on stocks that should be rising.
There are producers like PRU, AQG and RMS that have underperformed ABU since 2011 highs.

Why were stocks like NMG, AZM above 80c and then fell to below 10c?
I had looked at both and thought both were too high at 60c, so I thought the market was wrong when they went on into the 80’s.
The POG did not fall enough to explain the subsequent drops of 80-90%. Their assets did not change; the only thing that changed was how the market priced them then and now.
The market was either very wrong then or it’s very wrong now – and by a very large factor.
Why did LNC rise to $5 in Sep 2008 and then drop to $1 during the GFC, then rise to over $3 in 2011, but then fall to 46c a few months ago and a few months later and it rose back up to $3 again before correcting to a low of 2.26.

I follow the stock, its news flow, cash burn etc.
There were events that explained most of the price direction changes, but not the massive magnitude of the moves.

There are endless examples of huge moves that are not explainable by fundamental changes.
The question “is the market wrong?” is such an easy one to answer.
The larger markets broadly might price in risk, fundamentals etc reasonably well but even that has its obvious exceptions such as 2007 highs not pricing in credit risks and bubbles before the GFC hit.
What about the oil price and uranium price bubbles- both near $150 before collapsing to $30-40?
Uranium stocks like WHE rising to over $3 before crashing to below 10c.

The market is very wrong on a very regular basis especially in pricing individual stocks.
I held Andean for a year while it traded between 6c and 9c.
Then it rose to the high 30’s, much of that gain probably mainly on a new MD attracting his regular followers.
No new acquisitions, the same project they had at 6c; drilling and a FS followed to prove up the potential that was always there from the start for anyone that wanted to look. Why did the new MD come into a micro cap stock?
He saw the potential that I saw from the start.
The stock later got taken over at $6. Despite no consolidations and a series of dilutive cr’s it still became a 100bagger.
Why is the market pricing ABU at 3.9c?
Maybe for the same dumb reasons they priced Andean at 6c-9c for a year.
Maybe because the right long term investors hadn’t discovered it yet, maybe it just needs more time.
Who knows the exact reasons why these prices can be so badly mispriced?
Of course the market can be wrong and very wrong and for a lengthy period.
We just need to have the brains to profit from it and be glad it can be so wrong to give us the opportunities.
There is a very clear path to cash flow of $600-800mill just on current resources. That should be conservative. There is good potential to increase that through exploration. There is potential recently pointed out by management to extend that mine life further through high grade zones of Buccaneer. Even before Buccaneer, all that cash flow can fund a lot of exploration on the massive tenements and fund acquisitions of struggling juniors with quality projects that they can’t fund. This company has potential to grow to a billion dollar company over the years and it’s not difficult to see how.