whats going on?, page-23

I think what is going on is that at 45c AKI was overvalued and now the market has potentially swung the other way. This may be a great opportunity. I say AKI was overvalued because at 45c the market capitalisation (undiluted) was $200m with an EV of approximately $160m.

This is quite high when you consider they will expend the cash on proving the resource and then still need to raise $250m+ to fund the capital expenditure. And then production isn't until 2013.

Look at WPG as a comparison. The market capitalisation is $190m with an EV of $110m. One of WPG's projects is PN and Hawkes Nest which have a combined DSO resource of 38mt @ 63%. Production is set for the end of 2011 with sales in 2012. Initially they plan to produce at 3.3mtpa ramping up to 5mtpa with a DSO mine life of 10 years. This is a fully funded project in Australia.

However, now that AKI is capped at 100m with an EV of $60m it looks like a good punt.