Sleeping Giant Stirring - Abcourt Mines Primed for Rebirth

• Abcourt Mines owns the high-grade Sleeping Giant gold mine in Quebec which started production in January 2023 after upgrades and cleanup.
• The company aims to generate cash flow in the near term from Sleeping Giant to fund exploration of satellite deposits within trucking distance that can expand resources.
• There is strong upside potential but the company needs to demonstrate it can grow beyond the current 5-7-year mine life at Sleeping Giant.
• Attracting skilled labor is an industry-wide challenge but Abcourt has retained key staff and developed an efficient, aggressive culture to ramp up production.
• The company plans to go from 1,000 tons a week currently to full commercial production of 750 tons per day within 18 months.

About Abcourt Mines

Abcourt Mines is a Canadian gold producer and exploration company focused on unlocking value at the past-producing Sleeping Giant gold mine in Quebec. After acquiring the project in 2020, significant work has been undertaken to refurbish and optimize the mine and mill complex for a restart of gold production. With production now back online and several high-grade satellite deposits close by, Abcourt offers investors near-term cash flowing potential coupled with significant exploration upside.

Interview with Chief Executive Officer, Pascal Hamelin

Sleeping Giant Awakened: Near-Term Cash Flow and Growth Potential

Abcourt Mines is emerging from a transitional 2023 focused on generating cash flow from its fully permitted Sleeping Giant mine complex in prolific Quebec. Upgrades underway since new CEO Pascal Hamelin took over in April 2022 are unlocking the potential of existing infrastructure and gold resources. The aim is to direct revenue into expanding satellite deposits and extend Sleeping Giant’s mine life rapidly beyond the current 5-7 years.

As Hamelin summarized, “The growth is going to come fast because people like as we generate cash I'm going to open up level 5 & 6. Then you're just going to keep going. I don't have to wait for permits. I don't have to wait for anything. It's just getting the people in and the right culture in place.”

The key drivers are the high grades and margins from Sleeping Giant combined with no permitting requirements to expand underground operation. The 43-101 report in December 2022 verified over 175,000 ounces in resources grading nearly 5 grams per ton of gold.

Getting Started: Focus on Tidying Up and Preparing Sleeping Giant

When Hamelin took over in April 2022, Abcourt was losing money on its Elder mine so his priority was optimizing Sleeping Giant. After shutting down Elder, Hamelin described spending April to December “working on the geological model” and releasing an updated 43-101 report on Sleeping Giant. The next 6 months focused on “the engineering” and in June a Preliminary Economic Assessment (PEA) projected a pre-tax NPV of over $54 million Canadian.

As part of preparing infrastructure, an extensive cleanup from summer 2023 to September 2023 recovered over $12 million Canadian worth of gold from the mill circuits grading an astonishing 60 grams per ton.

The investment thesis for Abcourt Mines

• Near-term cash flow projected from high-grade Sleeping Giant mine with minimal ramp-up risk and existing infrastructure.
• Significant exploration and expansion potential from satellite deposits that can rapidly increase resources.
• Attractive jurisdiction in Quebec with no delays for permitting additional underground mines.
• Upside for a further windfall from mill cleanup and improved recoveries.
• Ambitious targets for doubling production within 18 months can re-rate valuation.
• Scarcity value as few junior miners start imminently just as the market cycle rebounds.

With gold prices recovering and few new near-term producers like Abcourt, the company is poised to generate profits to fund expansions quickly. The stock appears undervalued based on the potential to grow Sleeping Giant into a much larger operation. If executed smoothly, 2024 could see Abcourt rerating substantially. But risks remain around attracting qualified labor and delivering on upside promises. Interested investors should evaluate progress carefully in coming quarters.