Valuation of Abcourt Mines...Some junior miners are now trading at book valuation ratio of 1.0.
Abcourt's Mine's book ratio is now 0.864 which does suggest an undervaluation of at least 15%. To be fair, that would give the company a fair market valuation of at least 11 cents.
The company has low debt and still has many properties with assets that might be better defined with a proper resource 43-101 evaluation. This is a positive for a better future asset valuation if the needed work is done to reveal any real potential mining situations.
But from my perspective, I purchased Abcourt Mines based on its potential for increased earnings growth.
Increased revenue without profit means little to me. But I remain confident that these profits will come in due course.
Dividends are still an unknown future probability at this time.
Earnings could conceivably be used to speed up the needed property (resource definition) development work.
Or else, available cash might be better utilized to continue development of the SG mine and/or the Barvue mining site.
Management is using the same successful strategy to develop the Sleeping Giant mine as it has at Elder. Both mines are narrow veined systems and similar mining techniques are being used to extract their mineralization in the most expedient and efficient manner possible.
I wouldn't make any purchase of this company, based on any assumption about the undervaluation of its fixed assets, until some dramatic increase in their value has been proven on the balance sheet.
A property containing mineralization has no value unless it can be profitably mined.
Also, keep in mind, a mill is fixed in place. It is not an asset that can be easily transported to a better location.
And the Abcourt mill's present location may not be the most likely choice for another mining company's best use of funds.
An onsite mill may be a better longer term choice for any nearby company that may have a quality asset which they would like to mine.
But I do remain open to any pleasant if unexpected surprises. I have continued to buy!
I have high hopes for the financial success of Abcourt Mines once the Sleeping Giant mine is fully operational.
Commercial development is very likely to reveal much more gold than the present 43-101 has presently defined. It remains our best hope for any increase in shareholder value.
I await better days. Will you?
All the best! Java