ALK (ASX) Ann: Tomingley Five Year Plan

Originally posted by speculator101: ↑

Hi Anti,
I am quite surprised at just how poorly ALK is attempting to communicate with the market. I think it's pretty clear that Nic is not great at handling change, i.e. before the issues with highway costs, ALK had a clear concise plan, now.... he is not able to explain to me just what ALK is doing (not at all talking down the mining team, they are keeping the company in good stead, but.... that market cares very much about signalling).

This announcement has so many holes, it makes Biden and Trumps campaign messages look bullet proof

If ALK wanted to finally admit that the costs of the highway realignment have gone up, fine, then just say that (this seems to be the most important part of the announcement, and 1000% is price sensitive).
As you point out though, actual FID is still 7+ months away (could be longer, as they state 'early 2025).

We have an updated guidance for FY25 and the next few years (but not wildly off past estimates).

This part about the increased ASIC for the decline does not make sense to me. Why do this? Accounting reasons, tax?

It should not effect the free cashflow they need to build so that they are indeed capable of funding the highway and later plant upgrade (mind you, I would really... really appreciate a clear gantt chart showing timeline for undertaking these two major works).

The actual figures as mentioned by others (agree @Joelstar) are fine, especially once ALK hits it's straps at over 100k p.a.

Buuuuuuuuuuuuuuuut... why not include the remaining 3-5 years that were announced back with the 10 Yr LOM plan.....? Have these become uneconomic? The lack of clarity is really frustrating.

This is at least clear.... no open cut mining until 2026. So plant upgrade not needed until the first half of 2026.

Why not lead with this at the start of the announcement?

This table is.... annoying. Have to spend a minute or two working out how much has been spent already.... though I guess it does not change what still is to come...... it's basically a 50% increase in costs btw. To date, ALK has spent $22m of what is required.

What exactly is a 'capital plan', I mean, the table above looks like an outline of the costs, so then.... they are talking about the gantt chart I am after?

I have a few questions... like if the open pit is not going to start until FY 2026, yet the plant upgrade is going to occur in CY2025, where will the extra feed come from? Stockpiles?

Great to know this part, but... with not substance, it's just a throw away line.

The info session tomorrow will be.. interesting.

Expand

the session tomorrow will be interesting if people start asking questions.

Nic had plenty of time to prepare clear announcement and that is not the case here. And he knows some of us are being very critical of his poor communication. Also, isn't the BoDs approving these announcements? Can't anyone on the BoDs notice there is more clarity needed and assist?

I can't blame Nic 100% for the poor communication even though the buck stops with him but some people on that BoDs should provide some support with the preparation of these announcements and have to be accountable.

Some good points and news as costs blowout will be lower than expected.

while typing the above I noticed Nic responded to my email, and to paraphrase, it says something along the lines the final decision is referring to the bulk of the spending for the expansion rather than the early-stage preparations that are low costs - this should have been clear in the announcement as without such explanation, statements on page 1, 3 and 4 are contradicting each-other.

Main criteria that can influence the decision is if POG makes significant moves.

In nutshell some work will continue in order to everything to be ready for rapid deployment. Looks like some long lead items will be ordered too (if I am reading the email correct). It seems if POG does not fall by a lot the decision to go ahead will be OK'd in early 2025. As they get closer to that date ALK will be preparing the ground and make some larger investments such as long lead items as I can't see many long lead items being cheap - normally these are big plant components.
Once they make the call the team will be ready to develop the plant and rest at very fast pace. These are risks that should have been explained properly. Some of these risks need to be taken in order to make sure things will go smooth later on and the project does not fall too far behind.

And would have been nice if ALK could have put numbers behind these expenses with commentary why they are needed so everyone knows what is at risks and why ALK is taking these risks. - I mentioned this to Nic and believe he will include something along these lines.

He will explain/cover my points/questions tomorrow.