"Worst case scenario payback period changes to 7 years and there is 10 years to milk profits". I'm one of the detractors that was disappointed with the numbers released.
Nice post but I disagree with your wort case scenario. Unless they can improve the economics through a better quality resource/reserve or copper/gold shoots the lights out this will not see development light of day. It's not an attractive JV target for a deep pocketed miner as it stands. The returns metrics are frankly abysmal as reported. The reality is there are a hieararchial conga line (and it's a long one) of competing prospective developments in both Australia and overseas that cream this (irrespective of life of project-that's secondary to ROC) and all are in the one market looking for investment dollars. Those dollars as you well know seek out and gravitate to the highest returns on capital. Unfortunately, the numbers just don't cut it unless things change and this will find itself at the far end of that conga line of wannabe developments.
The worst case scenario is that it stays as a sub-economic deposit for a very long time (longer I suspect than most investors have patience) and hence does not attract development capital in any relevant time frame. I hope I'm wrong but the numbers are stark & don't lie
ALK Price at posting:
52.5¢ Sentiment: None Disclosure: Held
(20min delay)