ann: 65 gold anomalies identified lake mackay, page-111

Graywolf,

I have had discussions with a broker on this same issue.

Estimated income for any company, including ABU, is determined by them on what is known NOW about a company and its variables, and what they believe to be true based on the figures known NOW.

In ABU's case their estimated sp range for ABU is based on today's Gold price, give or take $100. The 150k throughput of ore is an estimation, it could be more, but also could be much less. The head grades achieved, and the estimated 90% recovery rates for the Gold may also prove to be incorrect. The cash costs of production may be much higher than expected, and at one stage up to $700 an ounce was mentioned in the worst case scenario, at this stage.

Then there are the chances of things not going to plan, flooding rain, the plant having problems etc. And they factor in some downtime in their estimates.

Depending on the POG, the broker has estimated ABU's yearly profits for Stage 2 are in the range of 30m to 50m. They have to be conservative in their outlook so as not to give false hope to their clients, or provide them with an unrealistic sp.

So this broker has a conservative sp of 8c to 10c once Stage 2 mining is underway. It is my conservative estimated valuation too, based on what I know about ABU and the Gold price today.

If the POG does jump much higher, then that will definitely impact on ABU's sp. If the JV partners make a discovery then that will impact the sp too. But these ifs and maybes can't be factored into ABU's sp yet, until they actually occur.

Optimistic, and non-ridiculous, sp projections for ABU range from 20c to 40c in Stage 3, some years down the track. DH has privately stated that they believe 30c+ is an achievable sp.

However conservative sp estimates for ABU in stage 3, with all things pretty much going to plan, are in the 10c to 20c range.

It is extremely difficult to estimate earnings for ABU at this stage. I believe that it is best to err on the side of caution until most of the variables become facts.

ABU has amazing potential, and 7c to 10c for Stage 2 mining is a conservative sp, but this is still an excellent sp. If all falls into place, and cash costs are at the lower end of the scale, and the POG continues to rise, then ABU could well be trading in the 14c to 20c range!

I certainly hope so.

Go ABU!