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Tagged with: ABX

Jul 2002 - Abelle Limited

Abelle Ltd (ABX) – A Neat, Very Profitable 75,000ozpa or so Gold Mine

  • Abelle is operating the old Gidgee mine (that used to belong to Australian Resources (ARS) before that company went into receivership in early 1999), and is currently producing about 75,000ozpa at a cash cost of US$215/oz and total cost of US$260/oz (at an A$ exchange rate of US57c).
  • Our initial impression on visiting the mine in mid-November 2001 was that it was capable of generating annual after-tax profit of A$2m to A$10m per year, depending on how well the visible gold in quartz underground was “running”.
  • Gold production has the capability to increase materially since about one-third of current production is coming from extremely low 0.8gpt stockpiles which could be replaced by oxide ore (when found) or from increased underground production.
  • In our opinion there is in fact significant upside potential for both gold production and life. However, it is more a case of where to start, and which order to take the targets in, and consequently we have used scenario analysis in pages 6 & 7. For example, the current underground life is conservatively 6 years, excluding reopening either Kingfisher or Omega, and a decline is being sunk in Butcherbird.
  • Currently the exploration direction is being made towards the potentially more prospective Gidgee anticline, by focusing on already delineated oxide targets and a number of classic exploration “gaps”, before the mill runs out of “soft” ore in about 2 years’ time. An alternative could be to spend possibly $10m more capex and increase underground production so as to replace both the surface sources.
  • We have provided profit and cashflow estimates for the scenario range (pages 6 & 7), with ABX’s share price (on a 5% NPV) capable of being between 40c and 105c.

Sep 2003 - Abelle Limited

Abelle Limited (ABX) – Innovation, Logic and First PNG Production possibly by 2005

  • Abelle’s PNG assets essentially consist of two regional, volcanic mega-complexes about 70km apart, and three significant mineralised systems, being Hamata- Hidden Valley (HHV), the Wafi Gold Complex (Wafi) and the Golpu Porphyry Copper-Gold Complex (also at Wafi). HHV is the most advanced, and is targeted to commence gold production during 2005, after about 12 months’ construction.
  • The 5% NPV for Abelle at current gold prices is almost A$2.80/share. However, it must be emphasised that this is only one of a number of possible scenarios, and there is significant potential for this valuation to be exceeded, simply through attaining slightly higher grades, or including Golpu, or success from any of the other promising adjacent prospects amongst the complexes of HHV and Wafi.
  • The scale of the complexes is huge, Wafi has a newly recognised >6g/t high grade Link Zone with potentially greater than 3.9moz, plus an existing ~4moz gold resource, and a number of gold orebodies within an inner radius of about 500m. Golpu has a delineated >90mt at 2.1% (cu-equivalent) copper-gold porphyry that extends beyond a depth of 1km from surface, & HHV consists of Hamata providing 350,000oz in early cashflow, followed by Hidden Valley / Kaveroi’s resource of >2moz gold and >37moz silver, amongst an overall resource base of ~4moz.
  • The 3 projects have a market stigma attached to them for their previous failure to be developed, but Abelle has made major innovative conceptual differences to previous feasibility studies, that dramatically improve their economics. Abelle has also re-interpreted Wafi as near horizontal mineralisation (and is verifying it through drilling), instead of the near vertical previous interpretations.
  • ABX is moving fast to bring HHV into production, scheduling completion of the feasibility study by the end of October 2003. Our site visit in August 2003 was part of a team examining where to construct the conveyor, access roads, plant etc.