Now fairly valued

ABM evaluated a very exotic and high grade gold resource that was prone to a high level of risk from the outset, this is why stocks like ABM are classified as "speculative". In defense of management I would like to say that they spent an inordinate amount of time and money evaluating Pirate and other "on surface" high grade gold veins.

They carried out a significant volume of bulk testing and assaying to arrive at a resource estimate that now appears to be overstated after several months of full scale processing. Management wisely chose not to debt fund the project, nor to over-capitalize with funding of a process plant. So everyone lives to fight another day, and equity is not significantly diluted.

A quick review indicates that the near surface open-pit deposits represent several years (maybe more, maybe up to 8 years??) of production of around 7 grams per ton gold, so production should still hit around 35,000 ounces of gold per year. So the company still remains on track to become a small scale gold producer that should generate several hundred dollars per ounce of profit for annualized profit of $5-10 million per year. Against which they carry a massive tax write-off that exceeds $125 million.

On the upside the company still retains a number of highly regarded prospects and other gold resources.

The near term charting technical picture looks horrible and is now heavily influenced by disappointed shareholders who are abandoning their positions based on earlier and more optimistic projections BUT no-one is looking at a secured creditor liquidation that typically applies when a mine fails.

Cash flow should be sufficient to allow ABM to maintain operations, and subject to outrageous operating costs that affect all Australian miners, may have an opportunity to trim costs and project a slower growth path.

May also have an opportunity to buy into other near term gold production opportunities that are available for near liquidation prices