For the price todayI think there is lots of room for improvement... KGHM is not well known on this continent, but shares are priced over 40 dollars... so those who feel the price is right, should move over to the other side.
The PP helps a lot, and the confidence of the JV provides some comfort that, the below statistics have some meaning... Charting shows that there is solid (albeit slow up to this point) accumulation moving in for quite a while... since the beginning of 2010.
Longer term charting studies show the price in this range is extremely oversold... AME took the go away in May hit as did many others... recent price and volume indicate at least for the short term... we could see a decent price increase. This should give those loose hands a chance to move to the sidelines.
An open pit in Kamloops with a mine life of 23 years... At this point the PP represents a toe in the water, the promised money, If the JV concludes, puts 41.5 million dollars in the bank for development...
Abacus will retain 49% and operate the joint venture company.
No wonder we are seeing a pop in volume, and the funny part is that strong hands bid. Perhaps the bashing going on is a part of the strong hands tactic, (Trying to stall the chase before they are loaded up as Market buys are likely the cheapest entry method now) or just a conspiracy theory. It's always funny to watch bears languish in their berry fodder...
At any rate... if the JV concludes... 41.5 million goes a long way. it's worth some consideration. Monthly charting studies show long term buy signals. The price can make a solid move from here and justify further cash inflow from the JV.
Abacus Mining has been advancing and developing its multiple copper porphyry deposits in the Afton Mining Camp since 2002, and now has an updated (January 2009) NI 43-101 resource estimate on the Ajax project which states the resource area has 365 million tonnes, measured and indicated, grading 0.31% Cu and 0.20 g/t Au, which contains 2.51 billion lbs of Cu, and 2.29 million ounces of Au. This 365 million tonne resource is an in pit resource, meaning it is totally contained within the proposed Ajax pit walls; it is not a property wide global resource.
“This PEA, which in many areas is as advanced as a prefeasibility study, clearly demonstrates the long term viability of this brownfield project. While the base case economics are themselves attractive, the significant economic value of this deposit is clearly demonstrated when using today's commodity market prices.” Tom McKeever, Executive Chairman of Abacus
The National Instrument 43-101 ("NI 43-101") compliant study was completed by Wardrop, a Tetra Tech Company ("Wardrop"), and contains production parameters, capital costs, operating costs, and other financial projections for an open pit mine processing 60,000 tonnes of mill feed per day. The metal prices used for the base case were US $2.00 per pound copper and US $700 per ounce gold.
Base Case Highlights (All figures in US dollars and pre-tax)
· Net present value of $192.7 million discounted at 8%
· Return on initial capital expenditures of $535 million is 40.4%
· Average life of mine cash costs of $1.17 per pound copper net of gold credit at $700 per ounce
· Average annual production estimated at 106 million pounds of copper and 99,400 ounces of gold in concentrate
· Mine life of approximately 23 years
· The pit inventory resource contains 2.6 billion pounds of copper and 2.4 million ounces of gold in the measured and indicated category