Comparison of recent mid cap results to ABU potential;EVN...

Comparison of recent mid cap results to ABU potential;

EVN underlying net profit of A$44.4 million but reported net loss of A$307.4 million after non-cash asset and investment impairments of A$384.3 million. That was from a relatively large 392,920 ounces produced.

PRU managed $38.4mill from production of 208,444oz at an all-in site cash cost (including production, royalties, development and sustaining capital) of US$1,150/oz.

Yesterday, KCN reported Profit before tax and significant items of only $17.2mill and a loss after tax and significant items of $323.7 million. This was from 195koz produced.

Not one of these managed any better than $45mill underlying earnings from nearly 200-400,000oz of production.
Before you think this is all the industry can come up with, MML reported a NPAT of US$50mill ($A55.7mill) (released this week) in a year when they had multiple delays and significant set backs and they achieved it off just 62,000oz of production. This is where grade makes a big difference. MML also have lower wages in the Philippines but it is an underground mine and the grade for the year was around 7g/t.

ABU has a nice little deposit called GH which contains around 59,000oz at 16.45g/t in a deposit down to only around 60ms with a much lower strip ratio than the main OP deposit. The core contains 49,000oz at 45g/t. this will be an incredibly high margin mine.
If management wanted to concentrate on this deposit alone and now with POG back up to near A$1600, they could easily come up with in excess of a NPAT of $50mill from this 59,000oz deposit alone. Compare that to the profits of the mid caps EVN, PRU and KCN from much higher gold production rates.
ABU has a much lower mc. GH is only going to have a short mine life but OP has a further 600koz of also very high grade ore with roughly half to come from open pit and we are still early in the exploration of this area with the deposit open along strike and at depth.
If ABU can't earn more than $50mill from GH I'll think about giving up long term investing and just trade. I probably won't find out though because they will more likely blend GH with lower grade ore through the year. Even so, once they expand to closer to 300ktpa, even a 10g/t blend should give us profits well in excess of $50mill after all expenses.