ASX:ALR Bearish Analysis

After reviewing years of ASX:ALR, formerly known as ASX:CHK, announcements, these are the things that, to me, stick out most:

1) The gravity and magnetics:

ASX:ALR, formerly known as ASX:CHK set themselves a challenge:

"HWDD06 is targeting coincident gravity and magnetic anomalies within a target zone extending from brecciation and strong haematite and sericite alteration intersected in drill hole CCHWDDH03"

Source: 14 Jun 2022, ASX:CHK, Exploration Update - Horse Well, Pernatty C & Warriner Creek https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02531142-3A595349

But then....

"Alteration in HWDD06W1 is consistent with distal IOCG alteration, but not a 'near miss' scenario. A Northwest-Southeast mafic intrusive body intersected in the bottom of the hole possibly represents a major fault, in which case the prospective area may lie to the north of the fault" Source: 31 Oct 2022, ASX:CHK, CHK September 2022 Quarterly Activities Report & Appendix 5B https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02591866-3A606191But HWDD06W1 is south, why would they say to go north? lol... because HWDD06W1 gave a bad result in my opinion. Speaking of this result, what were the grades of HWDD06/HWDD06W1? Does anyone know? And if not, WHY were these not reported?


Figure 1: Location of HWDD06 drill hole with residual gravity contours on Total Magnetic Intensity (TMI) colour map and proximity to Oak Dam West deposit sourced from Source: 31 Oct 2022, ASX:CHK, CHK September 2022 Quarterly Activities Report & Appendix 5B https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02591866-3A606191

Therefore, their theory that the gravity/magnetic survey extrapolated a prospect was incorrect in my opinion. I therefore do not trust the gravity/magnetics to find the type of prospects they are after.

2) The grades:

These are the best drill results ASX:ALR can display in my opinion:

source: Locality of Horse Well Prospect on a Total Magnetic Intensity (TMI) survey, with all adjoining tenements. Includes drilling highlights and early-stage minor faults and major discovered horse Well Fault. 6 May 2024, ASX:CHK, Cohiba Reviews IOCG Prospectivity of Olympic Domain Project https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02803547-3A641916

"Coupled with large intercepts of low-grade copper mineralisation (111.6m @ 0.27% Cu)" source: 6 May 2024, ASX:CHK, Cohiba Reviews IOCG Prospectivity of Olympic Domain Project https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02803547-3A641916

If high grade =
"Anything over 100 metres and 1% copper equivalent or better is considered to be high-grade. For example, Serengeti Resources announced 119.6 metres of 0.9% copper equivalent (copper plus gold values added together) at depths from 180 to 300 metres." source: https://www.mining.com/web/making-the-grade-understanding-exploration-results/

Are ASX:ALR, formerly known as ASX:CHK's grades commercially viable? Well, we don't know until many wells and a feasibility study is conducted, however, so far I believe they are not commercially viable. The main problem is the hits are low grade. The secondary problem is the location of some of their best hits were under 1190+ metres of overburden.... This itself might make a potential project hard to turn commercial in my opinion.

As anyone can see, even if you get a hit of 10.85%, it needs to be accompanied with "quantity" (otherwise it may not be worth mining). e.g 10.85% for 0.8m at 1,199m! For example: ASX:FAL a spinoff from the formerly ASX200 included ASX:CHN reported: "shallow gold intersections over ~4km of strike and up to 32.1g/t Au" source: ASX:FAL, 9 Feb 2022, "Investor Presentation". However, after additional RC and diamond drilling, the cores did not prove up this prospect in my opinion, not from a lack of trying. Therefore, if you drill around the 10.85% hit, do you find high grades with quantity? Therefore, even if ASX:ALR do manage to one day get a high grade hit, (" ...may have taken around '50' holes to hit ..." (72829625) ) after possibly 50 holes? (which is massive opportunity cost) Then they need to check the volume, which comes with the risk of a lack of X, Y, Z dimension as ASX:FAL failed to demonstrate.

What does a commercial copper field look like?

Source: 20/02/2024 ASX:BHP, HY2024 Results Presentationhttps://cdn-

api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02774281-3A636699

This above cross section clearly has deposits which are commercial grade of more than 100m and more than 1%. And when compared to ASX:CHK, they are superior by multiple factors.

3) Diversification:

Is it possible that even ASX:ALR, formerly known as ASX:CHK knows that their Australian assets may not ever become economical? Is this why they recently diversified into Canada? A plan B if you will? This potentially takes resources away from proving up Australian permits. If the Australian permits were so valuable why would they take on more risk? Do they have the funds for this?

4) Funding:

According to their 2023 Annual report, their permits (not including Canada) take upwards of $627,200/year in "commitment per annum" source:

Source: 28 Sep 2023, ASX:CHK, 2023 Annual Report to Shareholdershttps://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02718018-3A627180

If you also consider their salary/remuneration:
e.g
Nochum Labkowski = $60,000
Mordechai Benedikt = $228,000
Andrew Graham = $180,000

total for salary + commitments = $1,095,200/year (not including Canadian permits). Notwithstanding, they paid $3,065,764 in capitalised exploration expenditure for the year 30 June 2022. source: 28 Sep 2023, ASX:CHK, 2023 Annual Report to Shareholdershttps://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02718018-3A627180

This financial situation is unsustainable in my opinion and it doesn't make sense to me why they would pick now to diversify if they thought their Australian permits were worthy of persuing.

Will the new board continue the same remuneration practises?

5) Issued capital:

If approved, the number of shares on issue after the placements will be astronomical for a company that is a long way from turning any prospects commercial.


source:20 Feb 2024, ASX:CHK, Cohiba Raises Additional $850,000 Through Placementhttps://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02774384-3A636728

6) Consolidation:

Will ASX:CHK consider consolidating their shares, maybe 20:1, 50:1 or 100:1?

Will the market respond well to a consolidation? How do companies usually respond after a consolidation?

7) The recent ASX query [26 Feb 2024, ASX:CHK, Response to ASX Query]
According to the ASX Query:
"A post on 'X' by auser named '@TheGladiatorHC' at 4:58pm (AEDT), which ASX understands to be controlled by Phoenix, stating (emphasis added):The $50k Challenge update 33 Stock Code: Cohiba Minerals Ltd $CHK Shares Purchased: 41,666,667 Options: 20,833,333
Share Price: $0.0012(Placement Raise Price)
Sector: Copper/Lithium Reason for Buying:
Cohiba Minerals Limited is listed on the Australian Securities Exchange (ASX) with the primary focus of investing in the resource sector through direct tenement acquisition, joint ventures, farm in arrangements and new project generation.

The Company has projects located in South Australia,Western Australia, Queensland and Ontario, Canada, with a key focus on its Olympic Domain tenements located in South Australia. The company recently announced they are evaluating and assessing complementary new business development opportunities. With an enterprise value of sub $2m (at raise price)a major acquisition has the potential to create shareholder value.

In the interest of full transparency, my Company@_Phoenix Global or its associates own a significant amount of shares in Cohiba Minerals in addition to the shares and options purchased in the $50k challenge,in the same placement and under the same terms. Cohiba Minerals is also a client of Phoenix Global Investments & Phoenix is paid a fee by all stocks mentioned. Phoenix also was the lead manager for the placement completed in Feb2024 and was paid a 6% fee to manage this raise.

No information is personal financial advice & all information is general in nature. Please remember all content is intended to be used and must be used for informational purposes only. It is very important to do your own analysis before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify.
(the 'X Post')"
Source: 26 Feb 2024, ASX:CHK, Response to ASX Query https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02777189-3A637344

More on this here: 72779973, and here: 72780078, and here: 72786336, and here: 72786378.

8) "The thing with HW is that it wasn't a total miss" (source: 73768321). A user purporting to be the former ex-CEO/Executive Director of ASX:CHK, and ASX:ALR.

source: an extract of AndrewGeo, 09/05/24, Post#: 73742226

9) The "The new majority investors wanted to put their own team in place" source: 73742226. A user purporting to be the former ex-CEO/Executive Director of ASX:CHK, and ASX:ALR.

What did the "new majority investors" not like about the previous management of the company?

As you can see below the ASX code has now been changed today:

source: Code changed today as you can see on the ASX website: https://www.asx.com.au/markets/trade-our-cash-market/announcements.alr10)

10) Some shareholders think it has taken another permit around 50holes to hit something significant: " ...may have taken around '50' holes to hit ..." (72829625) ) (which is massive opportunity cost).

If you calculate how long they have spent drilling so far, then calculate how long it would take to drill 50x holes at the same rate of drilling, how many decades do shareholders have to wait for a significant discovery, if ever?

11) "Cohiba has opened up its data room for each prospect and commenced negotiations with major mining companies to form a potential Joint Venture partnership to progress exploration efforts." source: 6 May 2024, ASX:CHK, Cohiba Reviews IOCG Prospectivity of Olympic Domain Project

ASX:ALR's new management are indicating they are looking for a Joint Venture Partner. Is this because they know their expenses for the drilling so far are unsustainable if they continue to yield results similar to what they already have yielded? How much ownership of the permits will they lose from the Joint Venture?