conversation with chris stephens HiI spoke with the Chief...

conversation with chris stephens Hi

I spoke with the Chief Geologist and acting MD of Abra earlier in the week and will pass on his comments. It was refreshing talking to him as there was no bs. He was quite open about the problems.

The size of the resource is very large. It could be larger than the mineralised districts of Broken Hill and Mount Isa. However, there are two main issues:

1. The resource is deep;
2. The resource is currently low grade.

There are plenty of deeper underground mines than what Abra would be. However, for underground mines, grade is very important as they are costly to develop and operate. Abra is relatively low grade. Chris Stephens said their challenge will be to work out how to develop a bulk tonnage underground mine. I doubt that it is possible.

The one saving grace is that the resource is huge and is open in all directions. So they don't know whether it contains high grade zones. It is quite feasible that drilling to date has only hit the lower grade zones.

Drilling will commence next quarter and they should have their first resource announcement by June. If their drill results start to show higher grade material it might be worth a punt before the resource announcement. But otherwise, avoid.