Ann: Strategic Investment by Alkane Resources, page-50

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beveling8

69 Posts.

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01/11/18

13:01

Post #: 36350933
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Originally posted by eshmun: ↑

No I was not a holder of RMS at the time of the RMS bid. My attitude changed when RMS announced the grade of the resource at EM from the phase 1 and 2 drilling programs. I was expecting a higher grade based on some of the long intersections that had been previously announced. You can search my posts from the time to see how my thinking changed.

As far as EXU goes there is little point sharing any valuation models until the new Mace resource is announced and updated into the feasibilty study.

All this fear and talk of dilution is nonsensical to me currently, firstly as I don’t hold the stock so I can’t be diluted and secondly because it’s not the way I go about investing in these development stories. I just look at what the post funding enterprise value is likely to be and if that is significantly below the feasibilty NPV and I’m happy with how the feasibilty study was done and the assumptions used then I rate the stock as undervalued and start accumulating in tranches based on milestones being hit.

Once I see the size of Mace and where some new exploration might lead the company I will probably look at taking a stake again. Then I’ll wait for the updated feasibilty, funding options, etc etc before looking to add if I still like the way the story is hanging together.

I’m not necessarily looking for a lower entry, I’m just not interested while the RMS offer remains on the table. I don’t like this stock for what RMS are prepared to bring to the table, I like it for its standalone potential, shallow orebodies, relatively high grade and good exploration potential. I would like to see significant resources added which would lift the mine life and improve the value. The ALK deal will allow the further potential of the project to be unveiled IMO. Esh

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I'm sorry but while you may not be interested in dilution it would absolutely and should certainly be a concern of any current holder. The sole concern for EXU holders should be best return on capital, if they believe that is as a standalone approach so be it.

EXU Price at posting: 10.5¢ Sentiment: None Disclosure: Not Held
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