The short answer is, under achievement, lack of communication, doubt, credibility a history of saying one thing then doing another, grade fluctuation.
The Long answer is
2013 government changes in satisfying JORC meant ABU resources as with many juniors no longer complied.
Plan A, is what long term holders were sold, in plan A ABU were originally going to mine on site with the trial plant, after confirming 10k tonnes, produced 3-4k oz and they were going to grow organically from there, at what they thought was 85% recovery rate using the trial gravity plant, with much less cost and downside risk, as they worked out the resource from mining.
They then pissed off holders by doing a 360" cap raising and selling 20% of the company to Pacific Road. deciding instead to take an expensive rout of trucking ore on a 140k round trip on dirt roads in a part of the country that gets effected by the wet season, with all of the risk and cost that would entail, re fuel plant lease, inherited rehabilitation cost etc...
Given the benefit of the doubt ABU needed to hit the ground running and prove it was a good choice and that ABU could do it, but reporting became cagey at and infrequent.
They didn't do what they said and they didn't say what they meant.
Delays and more delays, deadlines passed, still not up and running properly.
The so say independently double checked stated grade has gone from the best in the country and one of the best in the world, to the point of mining for the sake of it and open to major consequence from minor gold price fluctuation, like TAM did.
Many holders also had TAM and lost the shirt off of their back, when TAM got into this level of profitability and once burned holder learned the lesson with TAM.
It is baffling how the top 2m 10k tonnes can produce 4k oz of gold and then these results, gold is heavy stuff if anything better grades should be deeper.
Reporting became less and less frequent, more and more cagey.
Info was clearly withheld, while painting a nosey picture.
The good in the situation now is that using the Coyote Plant, there is a lot of spare throughput and capacity in the plant as well as room to double the hours worked processing. The lower the SP, the more likely a takeover.
To stay operating with the current grade to meet forecast they need to double the ore processed for not much increase in cost, but the plant running at max capacity and 24/7 processing will only allow for meeting 60% of forecast if the grade does not drop more.
But the grade being in question with such variability over so many tonnes mined now leaves a Q mark on how consistent the grade will be as well as mine life.
How can many tonnes of bulk sampling say the grade is 13.3 - 10.9 gpt and mining turn out to be 7-8 gpt near break even?
They are obviously iether diluting and running to much waste ore dirt, else if the missing oz are not in the waste, the gold was not there or has been stolen.
Maybe the pressure to supply ore, led to loaders adding waste dirt to loads, maybe the extraction method mixes in too much waste, to many maybes, to little communication.
Regards Mark H
ABU Price at posting:
8.6¢ Sentiment: Hold Disclosure: Not Held
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