valuation & advice to the board

For those that track or own ABM Resources (ABU) as many TAM holders do it is interesting to update the valuations of these two companies and make some comparison as of the close today.

ABU TAM
Market Cap 104M 62M
M Oz 3.5M 1.1M
$ per Oz 29.6 56.0

That is very generous valuation for TAM based on pure Oz's in the ground. This is probably based on the belief that TAM can define another 1M Oz gold resource in short order (which it can) and some value for the Coyote and Tanami Central plants and permitting. The big risk here is can TAM transition from marginal miner and unfunded explorer to be a world class explorer?

So now that TAM is a pure explorer, the pressure is on. Most of us believe that the POG will improve which may help. It survived a massive onslaught in what most analysts now accept was paper based market manipulation.

I have always been on the record that TAM needs to be more like ABU so here is the "to do" list for management if you want to keep up the good will premium;

0. IT ALL ABOUT EXPLORATION NOW. Exploration without money is just arm waving. You need to make sure that as you transition you do not lose your exploration team and that you over fund them from this point. Don't give them any reason to think about jumping ship - give them all a 10% pay rise and a performance incentive and tell them to not be distracted for a second. Lets not die wondering!

1. Kavanagh: K1, K2 and K3 need to be drilled out and defined to 500K Oz measured/indicated resources and a BFS progressed based on a good 1M Oz inferred - with urgency within the next 6-9 months. Drill it with contractors - No more in house drilling underground - its just too slow - and drill it from surface with multiple rigs (rc with diamond tail) so it can be done in parallel. No more mucking about.

2. WA satellite tonnages: We need oxide ore on the WA tenements for low cost tonnage for blending with Kavanagh ore. No more Sandpiper/Kookaburra stuff ups - drill it out, define a resource and mine plan before you dig it up. That also means serious regional exploration as a lot of the EL's are on the final year renewal. A lot of ground is under cover, but there are excellent geochemical techniques in use now so it's back to basics, soils/lags, air core/RAB drilling then follow up drilling within 6 months. Use em or lose em now. Just copy ABM if in doubt.

3. Add more oxide tonnes/ounces for Tanami Central BFS. That means more basic exploration - once again that is regional exploration and follow up all the untested areas under cover. Just read the ABM resources presentation and follow a successful formula. Think "super pit" at Banjo and other historic mines and start looking for big tonnage. Better to have 5M tonnes at 1g/t than 1M tonnes at 5g/t if its at surface. Any BFS must be profitable at a prolonged US$1000 per oz

4. JV with your neighbors. Talk to ABM and look at toll treating the tails for their gravity plant. JV with other explorers on the WA side with potential projects nearby to Coyote (Conglin Yue, NTU, Orion Metals, Hemisphere, Slatey Creek - TAM should have purchased the 10K sqkm of NTU tenements that CLY picked up for $2M - a bargain)

But it's all about URGENCY and CONFIDENCE for exploration from this point. This is not a time to flinch - TAM needs to think and act like Darren Holden and Mark Creasy!!!