whose selling out ?, page-93

I will repost the chart again below for anyone that missed it and because it makes an important point about how easily a chart can reverse from a significant move down (or up). You need conviction to hold or buy at times like this based on fundamentals. Without that conviction I wouldn't be in. If I lost my conviction because of changing circumstances I would have sold based on that, not based on the chart. I use the chart to time entry or exit, not to tell me if I like the deposit/stock or not.
We are not all the same though and others with less faith in fundamentals prefer to use the charts alone or with overriding importance over fundamentals.
If the chart doesn’t look good now though, then it would not have looked good on 24th Jan 2011 either, when it looked very similar to now.
An almost identical pattern has formed now as then at the same distance above the long term trend line at nearly the same time of year (within 6 weeks).
From that low, it went on to triple over the next 11 months.
Based on that, to me the chart looks good and the fundamentals have NEVER looked this good. That’s no guarantee of a low here but there never are guarantees.
The fundamentals look so much better now than in June when ABU was under 4c because;
The POG appears to be much stronger now, holding well above the 1500 lows. Bernanke has just increased the length of time to hold interest rates down and doubled the size of monthly purchases from QE3 (still open ended).
We are much closer to production now with a clear plan and indicative timing having applied for trial mine permit and working towards mining license application.
Follow up gravity tests not only confirmed early test work which showed 85% recovery, but bettered it with 97.3% using the Knelson concentrator.
IMO we have probably discovered enough since the scoping study to add over 100,000oz recovered gold from open pit alone (from which we should boost expected cash flows from open pit by over $100mill to more than $360mill. I think my calculations have been very conservative and I did not go beyond 60ms depth on veins outside the scoping study pit design. I only looked at 30ms depth for GH. I don’t have the drill info the company has so I could be out by a fair bit but have tried to be conservative because of that. I think I will be positively “surprised” when the jorc comes out.
IMO we have also discovered enough to add a further 50-100,000oz to total resources beyond the 100,000 of shallow gold. I.e. I agree with Cannacord’s estimate of 150-170,000oz to be added to the jorc upgrade. However whether there has been enough drilling to get all of those ounces in on the next jorc upgrade it’s difficult to know. Might need more drilling to get to jorc standard on the full 150-170,000, but we will have to wait and see.
By the time we get to full commercial production we should see many more ounces added again.
IMO we will be able to add hundreds of millions in cash flow from u/g mining below 100ms with 2012 drilling of Western limb at depth showing some very good widths and grades to at least 180ms and open at depth. The jorc alone shows resources to 250ms and only the top 100ms is worked into cash flow estimates.
No mine I know of stopped at an open pit and left high grade ounces below without good reason. I see no reason why we would.
I can see an easy case for total cash flow of $700mill from combined pit plus u/g with plenty of further exploration upside.
Considering the value we have likely added in the last 6 months through discoveries, through significantly improved recoveries, the resilience in the POG and the increasing strong fundamentals for gold, the fact that we are back to 4.4c makes this as good a buy as it has ever been from a fundamental point of view.
As for the chart, don’t take my opinion or anyone else’s because it’s always open to interpretation- look at the similarities of the pattern that has developed now to that from Jan 2011 and decide for yourself.
For me the fundamentals are all I need.