ALK have 8 year LOM at Tomingley (without any further feed). 100kozpa at $1.5k margins at current POG you would think. Trading a little over 2x EBITDA. Cheap
Means you're getting Boda for free or negative carry costs at the moment IMO.
I am guessing Boda capex for 10Mtpa scenario would be circa $500-600m. I don't think that is impossible for a company the size of ALK MC and that also has a cashflow positive operation in Tomingley.
At current spot prices and average recovery grades for Boda/Kaiser OP I estimate that value per tonne of ore is currently c. A$50. If you assume costs at $30/t which I think on that scale might be doable, then we have $20/t margins. Ala $200m p.a. 3 year payback. Keeping in mind they have OP ore in indicated of 370Mt now or multi-decade LOM.
Don't get me wrong, it's a bull market asset (less so if they can find a higher grade starter pit somewhere - even 10-20% higher grade would probably do) but in my view it certainly has a non-zero value.
ALK Price at posting:
59.5¢ Sentiment: None Disclosure: Held
(20min delay)