Last session, ABI advanced by 20.6% on the TSX Venture Exchange (CVE) on a huge volume of 2.5M shares traded. This happened on the day when the company festively reported “excellent” silver and zinc values from the drilling program at its Abcourt-Barvue property in Quebec.
The success of the stock was evident on the American OTC market too. The shares jumped by over 20% on a record for the last four years turnover. It is not surprising that ABMBF is included in today’s watch list of two on-line stock newsletters – HotOtc.com and StockEgg.com – where it is given “a volume alert” notification.
However, the company’s financial state is far from perfect. This is a restraining factor that could impede the progress of the shares in the future. As at Sep. 30, 2010, Abcourt had virtually no cash on hand and owned a minor working capital of only $720K.
At least the company did make tough efforts to generate cash. In December, Abcourt announced two closings of previously announced issuing of units, for total gross proceeds of $3.15M. In the beginning of the year it completed a $1.5M private placement. With the raised funds, Abcourt might have improved its working capital balance, but it is quite doubtful if this is really enough, especially in the long term. The good news is that the company has no long-term debt to worry about.
Speaking about long-term development, we may easily notice that the price charts are relentless and raise no doubts at all. In April 2006, ABI was priced at $1.38. Since then, it has been going firmly down and has lost 85% of its value so far. There are no signs things are going to change radically in a positive way. Since 2009, the shares find it very hard to go over the $0.200 price border. For a long time now, ABI remains not very far from the zero mark.
Perhaps this is something that the company’s managers will need to consider carefully in the near future.
