BMR commentary re: ABI - Jan 16, 2011January 16, 2011
Abcourt Mines (ABI, TSX-V)
Abcourt is the newest addition to the BMR model portfolio at 20 cents early last week…the stock got as high as 23 cents and closed Friday at 19 cents for a weekly gain of half a penny…what first caught our attention with Abcourt was a massive increase in volume in December (record volume for this company)…volume is the best indicator of all that something potentially big is in the works for a stock…John, our technical analyst, picked up on this and then we went to work researching the fundamentals to see if they supported an extremely bullish technical scenario…we were astounded with our findings, and on January 10 I spent time with Abcourt President and CEO Renaud Hinse at the company’s Elder-Tagami Gold Project 10 kilometres northwest of Rouyn-Noranda…Elder is a former producer (over 300,000 ounces between 1944 and 1964) while Tagami is immediately to the north where drilling so far has outlined a 400-metre continuous zone of mineralization in a northeast direction at shallow depth averaging 8.9 grams of Gold per tonne over an average thickness of 2.23 metres as stated in the company’s November 4 news release…Abcourt is getting excellent results from both Elder and Tagami and the goal is to put Elder back into production as an underground operation by sometime in 2012…significant infrastructure is already in place…this is the type of underground mine that could produce about 35,000 ounces per year…a 43-101 completed in July, 2009, gave all-category resources for Elder of 215,000 ounces..a doubling of those resources is very possible given the current drilling success…meanwhile, near Val d’Or, Abcourt holds the Abcourt-Barvue Silver-Zinc Property which has substantial 43-101 reserves and resources that could be mostly mined by open-pit…GENIVAR completed a positive feasibility study for Abcourt-Barvue in 2007 and listed proven and probable ore reserves at 6,823,532 tonnes grading 57 g/t Ag and 3.11% zinc…there are also 43-101 measured, indicated and inferred resources with even higher silver grades…the economics for this project are robust based on GENIVAR’s 2007 study at baseline prices of $15 for Silver and 88 cents for zinc…the project’s pre-production capital cost was estimated by GENIVAR to be between $46 million and $60 million…drilling is on-going at Abcourt-Barvue in an effort to upgrade and augment resources and justify an expansion of the proposed mill from 650,000 tonnes per year to 1 million tonnes per day…Abcourt recently raised $4 million…with 110 million shares outstanding, its market cap currently sits at just $21 million…continued drilling success and even higher prices for Gold, silver and zinc would be extremely bullish for this stock which has a history of major moves…from mid-2005 to early 2006, Abcourt rocketed from 15 cents to nearly $1.40…
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