ALK (ASX) Ann: NMPP Regional Exploration Update

Originally posted by Antipater_100: ↑

that's what I was trying to get them to realise - they needed to drill couple of holes per quarter (over the last 2-3 years) in the nearby projects at NMPP. That way ALK would have slowly increased their knowledge of rest of the projects and narrow down on couple of targets with higher potential.
On that subject it seems Driell could be one with a chance. Once they drill few more holes there..
Boda2/3 will probably add couple of million of ounces eventually but it will be done when ALK can drill it from lower levels. They demonstrated enough to show any potential JV partner there is more to come from that area.

The 5y plan can include the Open Pits. I think the 5y plan is to show what Tomie will achieve in those 5y and what that operation will look like by year 5.

The plan will perhaps look like this:

1. Year 1 - a. cost to complete the expansion including highway relocation - ~$150m
b. Add another 125Koz of resource and extent LOM to 2033
c. Stabilise production at ~75Koz p/a

2. Year 2 - a. Add another 150Koz of resources and extend LOM to 2034
b. Acquire more exploration ground around TGO
c. Make new greenfield/brownfield discovery from nearby tenements (discovery does not mean adding resources)
d. Develop the first Open Pit

3. Year 3 - a. Add another 150Koz of resource and extend LOM to 2035 - from step-out drilling at existing deposits and from the discovery from year 2. b. Consolidate more ground around TGO
c. Find cost savings and reduce AISC by 5%
d. Start paying small dividend or make m&a deal with free cashflow from this operation.

4. Year 4 - a. Make another greenfield/brownfield discovery around TGO
b. Add another 200Koz of resources and extend LOM to 2036/37 - from step-out drilling at existing deposits and from the discovery from year 2. c. Develop the second Open Pit
d. Ramp up production to 8Koz

5. Year 5 - a. Add another 300Koz of resources from existing orebodies and the new discoveries and extend LOM to 2039.
b. Ramp up production to 95Koz p/a (though I prefer to see them hold at around 75Koz with longer LOM)
c. Reduce AISC by 5%.
d. Increase cash reserves to above $100m in absence of any m&a deal or start developing second operation if m&a deal was done.

Now that will look like good plan and show the company can grow. The reason why no insto buys into ALK is ALK can't show any growth - neither organic nor via m&a. It seems NMPP discovery counts for very little - for now.

I think ALK increased the exploration budget by about $1m. From memory they planned to spend about $5m and now they say about $6m.

Driell Creek is with a chance and it seems ALK will be focusing there now and also, Boda4 will be nice discovery - if it produces anything as the breccias are outcropping which means good chance for any deposit to be at shallow depth - if there is a deposit there. And who knows - as Boda2/3 will see some extra surveys being done that could attract a hole or two we may get lucky and ALK finds another intrusive nearby.

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NE quote "We are looking to do a couple of years of cash build and consolidation." (8:13)

Year 1 and 2 is primarily Rosewell Underground Mine building cash

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