Betting on Harmonics

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BoH-API: Abra Mining and Industrial Corporation

We are initiating coverage on Abra Mining and Industrial Corp. (PSE: AR).  We rate AR as a SPECULATIVE BUY with a price target of 2 centavos/share given the following:

• We believe OYM will push through with the JV with AR in developing the Capcapo property.
• Fair value at 2.34 centavos per share was made with reasonable assumptions.
• Technical target of 1.5 to 2.5 centavos per share.
• The recent allocation of P100 million from the authorized capital of AR for stock option plan and other incentives to deserving employees, officers and directors implies insider buying which is typical as corporate turning points.
• As of the September 19, 2011 price of 0.54 centavos/share, upside to 2 centavos/share is 270%.
• We think the near term catalyst will be a sudden surge in volume.

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