I'm not challenging management. In fact I support them 100%. But what I am saying is that exploration is a long odds game. The more promising targets you drill, with astute geological and geophysical input, the more likely you are to have a success. If you get ore grade intercepts, then the trick would be to do enough drilling to scope out the dimensions of the deposit.
Any serious major mining company geologist, exploration stock analyst or investor, can scope out the size/scale of the deposit and attribute a value, and they do. Some of you may remember that Barrick Gold made a very substantial bid for the company that had discovered the Pierina deposit in Peru after only eight (IIRC) drillholes. It is the initial discovery and first few holes that add value in terms of market cap. Each additional hole for a JORC resource costs the same, but adds less and less in value terms. We know that instos don't like to invest until a JORC resource/reserve has been demonstrated, but their day will come down track.
Of course there comes a time when it is right to do the JORC drilling. And that time is when the market cap is sufficiently strong that the company can raise funds on terms that are very favourable for existing shareholders. Under those circumstances, the company can probably raise enough to do JORC drilling as well as test the next twenty/fifty/hundred targets.
I agree emphatically with the notion that companies should NOT become distracted developing a small deposit, and take their eye off the main ball of finding the big one.
No worries if you guys disagree with me though. Thats what makes a market.
ABU Price at posting:
6.3¢ Sentiment: LT Buy Disclosure: Held
