The next quarterly estimated cash outflows are 15.5 million dollars.
Based on milling of 150,000 T per year ABU should average 37500 T per quarter.
On that figure ABU must produce 9718 ozs of gold per quarter to cover costs (using $1600 per oz)
Therefore to break even ABU must achieve the stated milling levels and put through a minimum of
about 8 grams per ton just to cover costs.
In the quarterly report they stated the were currently averaging 7.6
How can they say they are cash flow positive month over month when on Sept 21 they said they weren't able to declare commercial production but a mere 9 days later they declare commercial production and are cash flow positive even though they only produced about 6750ozs for this quarter
(8281 ozs - 1530 ozs produced last quarter , the gold in circuit shouldn't be considered.
The quarterly report is poorly compiled and leaves a lot of questions without any assurances from management that production is improving and costs are coming down. Based on a negative cash flow of over 5 million this quarter, they don't have a lot of time and money to get things right.
There is a loud and clear message in their AGM resolution number 6 to enable them to raise a total of 25% of the companies issued capital in any subsequent capital raising. They say it is common practice for companies to do this but to me, the alarm bells are ringing already.
ABU Price at posting:
19.0¢ Sentiment: Hold Disclosure: Held
