THE LAW OF DIMINISHING RETURNS MAY NOT APPLY AT ELDER Abcourt Mines is doing the best that they can with their limited financial resources. They are at a crossroads in their cycle of growth.
The recent grades in g/t gold from Elder have been steadily declining. The result is that additional input costs to maximize the tonnage of mineralized rock is becoming an increasing financial burden on the company. No impressive grades of mineralization seems to have been discovered as yet on lower levels. This could change in the future, but for the present, the recoverable mineralization from Elder, still appears to be low.
But with the recent higher gold price stability, the Elder mine remains a good source of revenue and cash flow for the company.
Since Elder is the only commercial mine in the Abcourt collection of properties, it needs to be kept operating.
From management's perspective, this is the best available route to fund the start up of the higher grade Sleeping Giant mine. Clearly, the company doesn't feel the issuance of debt is now a necessary strategy to achieve this objective.
The company has issued recent press releases about the desirability of certain specific drilling targets. But no information has been released about the execution of any such activity.
The latest press release related to any drilling plans seems to be directed at the Flordin property. A small injection of cash into drilling may add to its known resources.
https://abcourt.com/wp-content/uploads/2020/10/PR2020-10-14.pdf Past drilling expendures have been made at the Discovery/Flordin properties. Press releases have given some drilling results. Posted results usually give the highlights of the drilling activity. And some were really quite good! But these are narrow veined systems (typical of Abcourt mines) which are harder to mine on deeper levels.
The company insists that their past drilling results and previous old data does not provide a sufficient measurement to produce a reliable resource 43-101.
In most jurisdictions, some exploration or mining activity must be carried out to maintain the viability of the company's claims. Quebec is no different in this respect.
Flordin seems to have some open pit potential. But as a source of ore to be shipped to the SG mill, it may be mostly lower grade material. Perhaps, it is a poor prospect. But that remains to be seen.
The cost of an initial open pit mine could prove to be substantially less than one built underground. But only a preliminary economic assessment could determine this. That seems to be a long way off.
I am also interested in the viability of the Discovery property as a potential longer term mine replacement for the Elder/Tagami property when the need arises. Again, it would appear that a PEA is years away, since no 43-101 resource estimate, seems anywhere on the horizon.
The Discovery property may become an underground mine. It has only been drilled at fairly shallow levels, but the already known resources (gold in the hundreds of thousands of ounces?), from past historical disclosures, suggest that it may be a very valuable company asset.
The company may even be considering selling these properties in the future to some highest bidder. We just don't know.
With respect to the Elder/Tagami mine property, we do know that the company is on a good track in their exploratory efforts!
The company is presently exploring in the region of
measured resources on level 4 (18,881 tons at 6.35 g/t gold). Randomly searching in a region of
indicated or
inferred resources is more like looking for a needle in a haystack. The latter approach is not cost effective.
Presumably, before the eventual and necessary drilling at the SG mine, the company will also be seeking and mining those
measured resources first!
One might assume that they have done little or no recent exploratory drilling at Elder. They are focusing on what little information that they actually know.
https://abcourt.com/the-elder-mine/ Their present exploration on lower levels does not seem to be using any previous drilling activity as a guide. They seem to be following the lead that the previous high grade discovery on level 9 had provided. Perhaps they are just using some geometric trajectory to follow the mineralized path on a downward slope, as they explore these lower levels.
https://abcourt.com/wp-content/uploads/2019/11/PR2019-11-25.pdf The company did express an intention to drill on some lower levels but no press release was issued that addressed any such results.
https://abcourt.com/wp-content/uploads/2019/08/PR2019-08-22.pdf In summary, it appears that Abcourt is gambling a little.
A commercial Sleeping Giant mine is the best immediate goal that will drive the share price higher. The company sacrificed a slower logical growth profile that included the necessary drilling at Elder, so that the SG mine could become commercially viable, very much sooner!
And the Elder royalty payments will have to remain a little bit smaller for the duration of the expected delay. Sacrifice comes in many unexpected forms. Hinse gives a little, so the rest of Abcourt's shareholders, get a better piece of the action!
America has now chosen a new pair of presidential governors!
Soon Abcourt Mines, may choose one as well!
But good teamwork is always the answer
The people need to work together!
The people have spoken!
All the best! Java