also to point out ~$80m budget blowout is not much if the budget...

First 23 Last

Share
Profile

Follow
Antipater_100

7,598 Posts.

1425

18/05/24

07:47

Post #: 73889511
Share

Originally posted by Jacko22: ↑

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!

Expand

also to point out ~$80m budget blowout is not much if the budget was ~ $800m. But when the budget was ~ $85m to blow it by about $80m means one made massive mistakes. The %s matter.

Clearly you have never been given a budget or negotiated one or forecasted one to know what it means to blow it by about 100%.
In any other company you will get fired. In ALK you get performance rights.

ALK Price at posting: 62.0¢ Sentiment: None Disclosure: Held
3 Upvote

0 Great analysis

Reply