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Abzu Gold Down But Not Out
In the movie Rocky, local hero Rocky Balboa trained in a meat locker in Philadelphia.
Preparing for his shot at the title, local underdog Rocky Balboa punched frozen meat in a meat locker. This training would help give Rocky an edge, keeping him on his feet for 15 grueling rounds with World Heavyweight Champ Apollo Creed in the movie Rocky.
As the match progresses, Creed’s superior skill is countered by Rocky’s nearly unlimited ability to absorb punishment, and his dogged determination not to be knocked out. Like Rocky, Vancouver junior gold miner Abzu Gold (Stock Profile – TSXV:ABS) is also showing signs of unstoppable determination. Although the junior mining markets are difficult, the company is down but not out.
Further to news released on Sept. 18, 2012, Sept. 27, 2012, and July 23, 2012, Abzu Gold signed a definitive $2.5 million share-purchase agreement and strategic investment with Stonehouse Construction on October 3, 2012. An announcement that, for the most part, went unnoticed by the investment community.
Tim McCutcheon, chief executive officer, stated: “With the combined Stonehouse Construction investment and concurrent private placement, we intend to close on $3-million, our original target for this financing. Market conditions have been extremely challenging, and I am glad to report that, despite this, Abzu’s team has been able to raise the necessary funds to advance the company.”
Since then, no additional information has been released by the company. But, with all the past amendments, no news may be good news as the company inches closer to its long awaited deal.
Stonehouse Construction is an international construction company working on large-scale development projects in the natural resources sector. With over $4 billion in work in progress, operations include the development of the Lomonosovskoye iron ore deposit in Kazakhstan. This large greenfield deposit is currently in the proving phase and plans for a deep open pit mining and processing facility are in place.
Pursuant to the strategic investment in Abzu Gold, Stonehouse Construction will assume operational management of Abzu’s Nangodi project and has the right to appoint two directors to Abzu’s board (shareholders meeting – October 31, 2012). Nangodi, located in Ghana, is one of ten concessions Abzu holds in joint venture with Kinross Gold (Stock Profile – TSX:K NYSE:KGC). Abzu also controls six additional concessions in Ghana exclusively.
Ghana is Africa’s second largest gold producer and is generally considered to be among the top mining countries in Africa. Ghana has a strong legal and mineral titles system which has made Ghana a top African jurisdiction for foreign investment.
The movie Rocky was made on a budget of less than $1 million and shot in 28 days. It was the sleeper hit of 1976 and grossed over $225 million at the box office, won three Oscars and spawned five sequels. Investors in Abzu Gold are hoping for a similar story line.
Disclosure: at publication date Kirk Exner owns shares of Abzu Gold.
2012-11-13 14:22:30
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