Head grade-mill feed g p/t vs reconciled recovered g p/t gold @ Coyote gold processing plant

Hi all,I have just sent this letter, as an email off to Mike Etheridge & Brett Lambert,
I believe once read its self explanatory so I will leave it @ that ,
glta holders.
salt

Hi Brett & Mike,
ASX release 20 November old pirate operational overview
ABM Resources NL (“ABM” or “the Company”) has undertaken a thorough review of operational
performance at the Old Pirate Gold Mine, primarily focusing on the discrepancy being experienced
between mine estimated head grade and mill reconciled grade (the mine call factor), which was
reported on in the last Quarterly Report of 19 October 2015.
It was announced then that mill reconciliation only accounted for approximately 70 percent of,
mine estimated gold production up to that time.
'This trend is continuing".

Other sections of the plant have been closely examined, but only relatively small amounts of
trapped gold have been identified and recovered.
At the same time, an independent review of overall plant security has also been conducted,
which did not identify any weaknesses in the company’s security management and systems.

The secondary crusher has now been returned to service and the treatment of accumulated higher,
grade material has seen the average mill feed grade for November to date, based on provisional,
estimates, exceed the grade achieved in all prior months since operations commenced.


I wish to talk a bit more on/about this subject
Firstly i understand the focus to increase revenue as mine closure is now imminent unless we have a,
substantial increase in the au gold price, or dilution is further controlled through improved methods
of extraction & blasting techniques-this is continually being advanced through trial, error & innovation,
over time.

The reality being the differential between between mine estimated head grade and mill reconciled grade
has nothing what so ever to do with the on going concerns of dilution of g p/t during the extraction of,
mineralised ore, as mill feed assayed samples are down steam from mining & extraction
of mineralised ore.

This issue has been continual it has put @ risk the whole operation,  resulting in the lack of confidence by investors,
-the market, WHOM FEEL DECEIVED, causing the share price to plunge to ridiculously low levels whereby ABU,
is now extremely vulnerable to a low take over offer, & the reputation of ABU's directors is all but been destroyed.


I would like to communicate some thoughts regarding this issue.

1) Established already sampling procedures & techniques are correct as they have been independently verified,
as being so.

2) Clarified that ABU samples from mill feed conveyor every hour & batches the relevant- 12 hr shift (12 samples),
sending them to its own onsite Lab & completes evaluation of mill feed average grade through fire assay of batched samples,
this is procedure is known to be an extremely accurate method, there would be no doubt the fire assay procedure has been,
scrutinized & evaluated as being correct in method & resulting outcome.

3) Recovered gold is absolute, you get what you get,-known & absolute through gold pour.

4) Tonnage through conveyor weighbridge, haulage volumes known caparisons can be made, even if slightly out,
it is an unrelated issue to the differential of sampling mill feed determining g p/t vs recovered g p/t through gold pour .

5) Brett Lambert has come on board & no doubt used his experience to try & improve operational recovery of
mineralised ore  & has scrutinized operational-security.

6) Differential approx 30% 7.6g p/t recovered vs 10.9g p/t mill feed from quarterly results.
(will exclude lockup gold).

7) Recently advised 21st Dec in November production results recovered gold was 6.8g p/t vs unstated mill feed g p/t,
although Brett informed the market on the 20th November that the treatment of accumulated higher,
grade material has seen the average mill feed grade for November to date, based on provisional,
estimates, exceed the grade achieved in all prior months since operations commenced.

So i will conclude that as we only had 9-10 days  to go in November that gold recovery was a big disappointment,
further as it was implied until the 20th Nov, that we had the highest mill feed so far, thus sampled results for mill,
feed refereed to by Brett had to have been in excess, of 10.9 g p/t,-so for the purpose of this conversation i will,
make some assumptions & it matters not if they are exactly right,
So lets presume head grade- mill feed was above 10.9 g p/t say 11.5 g p/t & as actual recovery was 6.8g p/t,
the differential has expanded & would be now be some 40% differential between sampled mill feed & gold recovered,
or more importantly 40% of gold unaccounted for - this missing revenue that would undoubtedly if accounted for,
mean that the whole old prate mining operation would profitable & therefore should continue.

8) Is there something wrong operationally?, very unlikely - if the plants gravity traps were still being saturated,
the differential of mill feed vs recovered gold would not increase & it would likely result in a plant blockage as the
totality of the variance is now to large so we will give this the virtually no possibility.


The largest security risk is only running this operation on a two weeks on one week off  basis.
9) Unfortunately this below scenario is the most likely one, given virtually all other possibilities have been eliminated ,
yet as Brett Quoted-the issue still remains .

considerations:
1) There are gravity gold traps on the dry side not just the wet side of the process plant,
all are gravity traps 7 gold contained within are more assessable when the plant is shut,
down especially if  for a whole week.

2) Dry side gravity traps are not always internal like the wet side, especially when coarse gold & nuggets are evident,
i have seen this @ hill 50 gold mine in Mount Magnet-hundreds of thousands of dollars were unaccounted for, as one
operator had worked out the in-obvious to all others.!

3 ) Are there many operators or shift bosses from Tanami day's that may have prior very detailed knowledge of
the coyote gold processing plants idiosyncrasies -RE gravity traps etc

4) Is it the same personal that are left on site routinely during the operational shut down week off ?
IF so that"s just plain stupid?

5) Don;t presume because you are isolated that gold would be hard to get off site, it could be being stashed
almost any were & with a hand held GPS marked for retrieval latter or be leaving site on one of the many
freight trucks etc  

6) Regardless if gravity traps (dry or wet side of processing circuit ) or coarse gold containment areas above around,
or inside of gold room were being compromised, they would be far harder to access while plant is operational,
also when plant is operational you will have far more personal -eyes about.

Please consider the reality  that as all other plausible explanations for the discrepancy have been evaluated &,
therefore excluded & as the issue is still evident Quote in the words of Brett Lambert- 'This trend is continuing".
then IMO this should be the next step in the elimination process.

There is literally now many millions of dollars of gold that is unaccounted for, being the differential between,
actual recovered-poured gold & mill feed fire assayed average feed samples, if this 30-40% of gold were to be inclusive
in the cash flow, ABU old pirate operations would not just be financially viable but very profitable, therefore as ABU,
is considering moving to 24hr per day operations, please do so ASAP so a close evaluation/comparison can be
made between mill feed vs recovered gold if they begin to move closer to each other with normal operational variance
you would know what the likely issue has been all this time, & further investigations could be made, & deterrents like
permanent video security could be set up on site.
IMO you owe it to share holders to give 24hr 7day's per week, that is permanent Coyote gold recovery operations a,
decent go as early as possible so results can be evaluated, before final decisions on ABU's future are,
determined from results

regards salt