Thursday, January 10, 2008

Abcourt Mines, or why should I bother?

Just for a change in pace (for me and my site) I've decided to look at at a few stocks once in a while. It's informative for you (hopefully) and forces me look a little closer at those companies I follow.

Abcourt Mines ABI.V it also trades in Frankfurt and in the pink sheets, but I’ll let you look up the symbol if you care.

To be honest Abcourt has been a looser for me, I bought some a couple of years ago, made a small gain,and sold. Recently I dived back in at what I though was a bargain at about .60 only to have it languish and falter on a combination of no substantive reporting on progress and repeated missed targets for getting production going. Since its plunge I have averaged down but without some real news of progress I would not invest any more than I already have. Drill results are fine but I want a time table for production, and I want to see goals set and met.

On the surface Abcourt seems to have the goods; known and growing resources, 12 million in mothballed infrastructure (estimated replacement value) and it resides in Quebec where the Provincial Government practically pays you to drill holes in the ground.


So what do you get for today’s .36 share price?

.005 ounces of gold/share

.51 ounces of silver/share

16.93 pounds of zinc/share

2.56 pounds of copper/share


Now prices are fluctuating a fair bit but this certainly represents over $30 per share of resources spread over a couple of different projects.


The most advanced project is the Abcourt-Barvue zinc-silver mine touting compliant resources of 500 million lbs of zinc, and 13+ million ounces of silver. In the recent optimized feasibility study it states that $43 million is required to bring this property into production with a 4-5 year payback period. Mine life is expected to be 13 years, with potential to expand the resource on site or perhaps truck in ore from near by satellite properties.

Abcourt has several satellite properties that are undergoing or have had recent drilling programs ,
Aldermac – zinc-copper
Jonpol zinc, copper, silver

Abcourt also has the separate Elder property, a past producing gold mine showing 200,000 oz of 43-101 compliant gold with much of it’s infrastructure intact.

Here’s a detailed paper by Howlett Research

Abcourt has 48,064,898 fully diluted shares which at .36 makes for a market cap of 17.3 million which is pretty damn cheap for what you get provided they ever get off their asses, live up to some promises and actually get the Abcourt-Barvue property into production.

That’s the major problem with this company, the Hinse family seems to think that because they hold 30% and control the board they don’t need to give us poor peasant shareholders accurate or timely information. Abcourt has an ugly ass web site and they don't make any effort to update their pages to keep them current. From what I've seen in online forums, small stock holders are just plain sick and tired waiting for news or action from this company, and I don't blame them.

Are they just building the resource, stalling and hoping for a take over, or are they serious? I can’t say that it’s clear either way, at least not to this poor slob.

At .36 this stock seems to have valid reasons for some solid upside, however I’m no longer confident that this team wants to achieve production and I don’t have the patience to wait indefinitely to find out, I guess I’m just frustrated as are many other stock holders who were promised production last year.

(Of course the moment I sell someone will probably buy them out at a 2.50 which is just my kind of luck.)

So Abcourt, Tell my why should I bother holding or enlarging my stake?

Do something, anything to convince me and other stock holders we are not wasting our time and money.


DISCLAIMER

These are not endorsements, I'm simply going through my stock watch list in no particular order and commenting on the companies themselves, my luck with them and my meagre insight. Some of these companies I own, some I have owned and some I just watch looking for opportunity or wishing I had more cash to invest.

While I believe that not having precious metals is foolish and state so frequently, I also believe that taking stock advice without doing your own research is just as foolish. Be warned and do your own due diligence, and don't you dare blame me for your losses if any. Of course comments are always welcome as are monetary rewards should you make money by ignoring this warning.

1 comment:

Mohsin002 said...

and.. u were DEAD RIGHT