problems with ALK are not what ALK will deliver over the next 5 years with Tomie but what ALK can/will deliver outside Tomie in that same period.
The only other growth story with ALK is if they land decent JV with NMPP. But I doubt that will be on the cards until ALK does one of the two or both:
1. ALK discovers shallow orebody with higher grades. This will enhance the SS metrics and will be instant winner.
2. ALK expands the deeper high-grade zones to add more tonnages and improves the grade of the UG resource. This will get the attention of the big players who can afford to start with UG at the same time as with the Open Pits and run 25-30Mt plant.
If ALK achieves one or both points then ALK are guaranteed to attract JV partner who will pay good coin for the project. Otherwise, we are most likely to attract mid-tier partner and the price won't be what many hope for. Unless we see Au and Cu prices jump around 30%. Hope I am wrong on this particular point.
So I don't see much excitement over the next 12 months unless ALK surprises with some early exploration results. Hence why I am calling on ALK to boost their exploration budget at NMPP by about $1m - $2m per year. Considering how much FCF they will generate this is drop in the ocean but has the potential to make big impact.
Now compare ALK's to GMD's 5 year plan and you will see a big difference. GMD's plan is a growth story while ALK's plan is they will accumulate lot of cash. Nic could not explain clearly anything else beyond that point. There is no story or clear message what they plan to do with this FCF. So, one can be excused if one thinks all that cash could be used to pay the BoDs and the management good wages and huge bonuses and not much else.
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