PRX 0.00% 0.2¢ prodigy gold nl

Petey, thanks but don’t worry about me.I have been in the market...

  1. 13,756 Posts.
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    Petey, thanks but don’t worry about me.
    I have been in the market for decades and know that even institutional sellers do not stop a stock from rising when it’s due to rise.
    I watched Andean drop from 9c to 4.2c in a very weak market but held on. It got taken over at over $7.
    I saw EQN drop from $6 to $1 during the GFC. Then it was taken over around $8.
    There was much, much heavier selling in those examples than we have now on ABU.
    Short term selling does not worry me on a long term stock.

    Loyalroyal;
    We already have in excess of 3mill ounces.
    At Buccaneer we have [email protected]/t.
    Within that, we have a higher grade resource of [email protected]/t at a 0.4g/t cut-off.
    Most of the 0.8g/t resource sits in an area within the main Buccaneer zone roughly 250ms by 400ms by 350ms deep.
    Looking at the sections and plan, perhaps (very roughly) 1.2-1.5Moz would be contained in a reasonably low strip ratio open pit.
    There is certainly potential that that is already going to be profitable at $1600 gold.
    If we conservatively assume it only has a near zero NPV at $1600, then at $2000 gold it may have a NPV of $480mill ($400 extra margin from higher POG times 1.2Moz).
    If it had a NPV of $120mill at $1600, then it would be more like $600mill at $2000 gold.
    At $2400 gold, it would be around $960mill - $1.1bill.
    Of course at $2400 and probably at $2000 gold as well, the lower cut off grade will likely be used instead of the 0.4g/t cut-off increasing the likely in pit reserves probably to closer to 2Moz so increasing the NPV further.
    There is potential for around 28c on Buccaneer alone for those of us bullish on gold.
    As for Old Pirate, based on the scoping study, the initial estimate is for 261,000oz over 2 years for a cash flow of $257mill.
    Chances are high that the 261,000oz will be significantly increased after the discovery of the 185m long vein at 31g/t which adds ounces through the vein itself and (from latest presentation);
    “"East Side" vein will likely be encompassed in a widened pit design also enabling MORE OF EXISTING Old Pirate resource to be included in the pit
    Strike length 185 metres averaging 30.96g/t gold including:
    Strike length 32 metres averaging 101g/t gold
    330m+ further cumulative strike length East Side vein pending assay”.

    Ignoring the likely increases in recovered gold and staying with 261,000oz; Add $400/oz for a $2,000 POG; 261koz x $400/oz adds $105mill to the cash flow bringing it up to $361mill.
    It would be $466mill for $2,400 POG.

    While Old Pirate would clearly gain strong value with a higher POG, the larger upside for ABU would come from Buccaneer.
    This gives us the dual benefit of very strong leverage to higher POG through Buccaneer on top of OP upside, and the safety of high margins at Old Pirate in case POG does not rise, with still strong upside from exploration rather than a higher POG.
    At $2000 gold, there is good potential for ABU to be worth $850 mill before tax.
    At $2400 gold, it could be more like $1.5bill.
    This from a higher POG but ignoring strong exploration potential.
    We also have Hyperion with toll treatment potential and the earlier stage Kroda and a very large exploration holding.

    All gold stocks would benefit greatly from $2000-$2400 gold.
    ABU especially so thanks to the very large Buccaneer system.
    ABU also benefits from having excellent exploration potential for large ounces of both lower grade deposits and a very high grade system.
    Not to mention much lower risk of investing in assets in our own country.
    Those selling now may be making the same mistake as those that were selling Andean at 6c.
    I too sold that one way too early but at least I waited till I tripled my money above 30c.
    In Andean I saw strong exploration upside as well as POG upside.
    I got spooked out by high sovereign risk.
    I don’t need to worry about that with ABU.
 
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