Ann: RIU Sydney Resources Round-Up, page-10

We may find in 12 months that the current SP will turn out to be a bargain as ALK is suffering from a poor year and especially last quarter for production and also costs and the chair’s selling.

I see a lot of negative comments about ALK over recent months and while many are fine one needs to look at the positives that may drive the SP higher over the next 6-12 months.

With the current high POG, if or once ALK hits the production of 80k Oz pa to maybe over 100k Oz pa at a reasonable AISC then ALK should see a much higher SP - it would not surprise me if the SP doubled from current levels just based on this factor alone. A MC of up to $1b is not out of the question in 12 months based on MC of comparable stocks especially if POG goes higher as market consensus predicts and gold stocks are re-rated upwards.

I doubt that Boda SS will have much if any real impact on the SP, ie it won’t move the needle, as there is no value in the current SP and even if the SS shows a NPV of $1b or multiples higher the market will note ALK is not capable of funding the cap ex based on the low MC. This has happened many time for other stocks. I expect an NPV at least $1b but it won’t surprise me if it’s lower.

If the Boda SS NPV is reasonable a JV would be a significant catalyst but I cannot see an actual JV being announced for at least a year and probably a lot longer.

I hold ALK for Tommie NOT for Boda, NOT for a positive JV announcement on Boda and NOT for any other exploration upside. ALK SP is very cheap if they achieve the Tommie production from Rosewell at a reasonable AISC even with a lot of hedging. Any other positive developments are a bonus if the SP reacts in an upward movement.