ALK will have to make another ~ $80m extra profit to get the money back from this investment and break-even - meaning another year before ROI starts to make sense. But by then LOM shrinks to only few years. Hence the importance of adding more ounces to the resource. No biases here just simple math and strategy.
You keep banging on about blowing the budget, but it hasn't been blown to the extent, that like some that have gone into C&M because of it, nor have they had to undertake a fire sale of their 'saleable' assets, like some others. Nor have they had to raise equity. And LOM only shrinks if resources aren't being/can't be converted into a reserve. Or are you saying that LOM shrinks if you don't keep adding to resources? Cryptic q BTW.
Anyway, as long as reserves continue to grow, the LOM issue is covered off - so that's not the problem. And whilst they are still drilling UG there's always the possibility of finding further resources.
It's the age old problem, do you look for a good business to invest in to park your cash, or do you look for P&D so you can get in and out quickly (assuming you guessed the right time to enter). Personally, I'd prefer a a good, solid business that has 15M Oz AuEq not valued by the market at present!
ALK Price at posting:
62.0¢ Sentiment: Buy Disclosure: Held
(20min delay)