you could be right. I see your point and even though I don't fully agree with I accept it makes sense on some fronts. and that brings us back to ALK having to do more drilling on two fronts:
1. Drill around known high grade zones at Boda, Kaiser and Boda2/3 to enhance the average grade and add more tonnages - as I said it before.
2. Push for another discovery and hope it will be higher grade.
Option 1 is very doable and it's just to force (yes force as when I suggested to them in the past I was told it is not needed.. along those lines) ALK leadership team to implement it. ALK reported intercepting few high grade zones in areas they did not expect during the infill drilling of Boda. ALK can test these zones at depth and add more resources at higher grades. Also, Boda2/3 around 094 is producing higher than average grades and ALK should sink few more holes there in order to calculate a resource. Also, ALK has not tested properly around 005 for continuation of that zone to the northeast and this zone host well above average grades.
So the options are there and it is up to ALK to accept they need higher grades. Even if these grades end up being mined at later stage it would mean improved returns at later stage. Still matters.
While ago I calculated how much ALK needs to find in order to push the average grade to around 6.1g/t AuEq which will make it lot more attractive than is right now. They need about 3.5Moz at 0.77g/t AuEq to push the average grade to 0.61g/t AuEq. I believe they can achieve this from existing high grade zones. But it will not change the metrics for the initial years of the project.
ALK Price at posting:
52.0¢ Sentiment: None Disclosure: Held
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