ABZ really displaying the classic image of the mine life cycle
The rally to near 80c into December 2010 is the speculation phase
Since then, ABZ moved into the orphan phase when most of the near term upside had been priced in and the next hurdle of production funding and offtake were being sourced
Now however, we are right on the crux of moving into the institutional investment phase.
Doesn't take a genius to work out that sourcing $12M of capex to generate between 750k-1.5Mtmpa bauxite at margins of between $30-50/t (annual margin then of between $22-75M potential) is not going to be a hard ask - it is sourcing the best possible partner that they are doing and which has taken time
IMO the moment ABZ confirm offtake and funding with production scheduled for 2014 anything under the Xinfa placement price of 38c is insane selling
Even now, if you consider they could get funding from Macquarie with a turn around of likely 4-8 weeks, under 25c is a no brainer (discounted it back from 38c as they would have to source offtake - but not a hard task)
ABX Price at posting:
15.5¢ Sentiment: Buy Disclosure: Held
