ALK 4.40% 43.5¢ alkane resources limited

Ann: RIU Sydney Resources Round-Up, page-14

  1. 9,037 Posts.
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    ALK have 8 year LOM at Tomingley (without any further feed). 100kozpa at $1.5k margins at current POG you would think. Trading a little over 2x EBITDA. Cheap

    Means you're getting Boda for free or negative carry costs at the moment IMO.

    I am guessing Boda capex for 10Mtpa scenario would be circa $500-600m. I don't think that is impossible for a company the size of ALK MC and that also has a cashflow positive operation in Tomingley.

    At current spot prices and average recovery grades for Boda/Kaiser OP I estimate that value per tonne of ore is currently c. A$50. If you assume costs at $30/t which I think on that scale might be doable, then we have $20/t margins. Ala $200m p.a. 3 year payback. Keeping in mind they have OP ore in indicated of 370Mt now or multi-decade LOM.

    Don't get me wrong, it's a bull market asset (less so if they can find a higher grade starter pit somewhere - even 10-20% higher grade would probably do) but in my view it certainly has a non-zero value.
 
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43.5¢
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-0.020(4.40%)
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45.5¢ 46.5¢ 43.5¢ $1.713M 3.887M

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14 241595 43.5¢
 

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44.0¢ 57313 11
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