Hey Anti, finally had time to have a listen properly (first time through I feel alseep
).
Whilst things are fresh in my mine, the 'plan B' that Nic answers a question to (well done HC crew for asking it!), was very illuminating, with the admission that FY25 production profile (70k-80k) would be viable and... basically have a long mine life (to quote Nic "many years"), especially as they could bring in the Callomia 1 & 2 U/G extensions (at depth, which he states would not require more permitting, same for Roswell and potentially Antonio), which.... I assume are not in the 5yr mine plan at all, though could have been in the 10yr?
I was frustrated that he did not actually articulate what the exact 'depth below ground' cut off was for being able to mine U/G before the highway would need to be re-aligned. This is a key bit of info that could allow investors to gauge for themselves what is the better option in regards to the large amount of capital being allocated to the open pit ounces, when.... potentially, the same amount of FCF could be achieved without doing it.....
He implies near the end that because you cannot U/G mine close to the surface the lost ounces are the major factor, but... is it?
I would argue that as soon as the company realised that cost escalation was occurring and.... that the actual permitting would take years (they know this, it's their speciality), plan B should have been running concurrently. Nic does not discuss what permitting would be needed to focus on plan B, but I feel confident it would be far less than what was needed for the highway re-alignment permitting.
The question raised about Roswell MRE, was not a clear answer by Nic, but perhaps he misunderstood.... I think most of us want to know are they going to drill for MRE expansion, not just MRE conversion, as if Roswell was able to prove a 5+ mine life, then option B becomes much more logical/palatable.
I look at the open pits a bit like RMS did with Edna May Stage 3 cuttback, with a much higher POG, it makes sense, but.... RMS have the luxury of a huge amount of cash, ALK is the opposite, looking to pile on more debt, and stretch itself....
I just struggle to see why ALK is pushing so hard for the open pits, why not just delay 12 months, get the current plant upgrades working perfectly, the paste plant, Roswell humming, get a bit more ore from the two U/G Caloma deposits and generate FCF, which would reduce the need for debt and allow exploration on all of ALKs assets.This is making me question why I hold ALK. They go from being conservative, meeting targets and exploring, to almost the opposite all to get these open pits which... are high strip, and require a highway to be realigned.
hmm.....
(20min delay)