nearology , whats it worth ?, page-4

A merger would be extremely unlikely IMHO at the current relative valuations - there is no real premium for TAM being a producer. TAM (unlike ABU) have no commercial imperative to merge as they have an income stream that can pay for drilling and debt capital for the CT upgrade. They have ready ounces at the tip of the drill bit - they just must execute right now with lots of results and information flow (see ABU!).

The benefit of any merger would be all ABU's. They need central Tanami or Coyote CIP to get into production, even if they do their own heap leach, otherwise it's at least $30M of capital on top of $35M for crush and heap leach.

The real hot story of the past 24 hours is the Tanami tenement sale by NTU. It will be interesting to see how this transaction plays out. NTU are desperate for the cash as they want to get Browns Range HREE into production ASAP. ABU could well be a buyer as it would give them the dominant ground position in the Tanami but they already have a big position in the Arunta to service so its probably unlikely.

This is major acreage (approx 7,000 sqkm) that would be a game changer for TAM if they could acquire it cheaply (<$2M but that is my speculation). Lots of green fields and blue sky of granted drill ready tenements and a 3.5M ounce resource upgrade makes and gold at $2000 an ounce in 6 months makes a $1 share price easy to justify because punters want the potential upside.

Further to my previous note, TAM needs a game changer - acquiring extra green fields (instead of dropping ground) would show the market that they really are an explorer who is already in production (not a producer that does a bit of exploration)!