ALK 2.27% 43.0¢ alkane resources limited

If Berkshire Hathaway take a substantial interest in Alkane I...

  1. 1,239 Posts.
    If Berkshire Hathaway take a substantial interest in Alkane I will call you the Maestro from now on.
    Well, looking at it objectively, except for our small size we are exactly what WB is looking for. We have everything needed to be a long term (80 years) moneymaker, except the permit and the capital to start the DZP. The permit will come sooner or later, given the interest NSW as an entity has in the project. And the financing - well, if there is anything Berkshire has enough of, its cash. So if they get to buy 100 mio shares at 25-30 cents, then grant us a 500 mio loan at 3 % and offer an additional loan at 5% to cover an other financing shortfalls, they will see their investment go from 25 mio to at least 250 mio and still make a reasonable amount of money on the interest, too. BTW, that's what I occasionally said that ShinEtsu should have been doing these last 2 years (except that imO they should have bought a bunch of shares on the open market and then make the financing (10%DZP) and + loan offer, maybe requiring from the other big holders to sell them another few percentage points to sweeten the pot).

    We are long term holders and the Company has repeatedly stated that it strives for shareholder value. I have no reason do doubt that.
    Until this news I would have agrred with you.

    The sooner we get into production, with minimal debt the sooner the Company can commence a buy back scheme that will eventually lead to bigger dividends for loyal holders.
    This fear of debt (which I don't doubt exists at Dubbo headquarters, too) is fuzzing with your math. As I said before, for a small amount of additional capital (a mere 25-30 mio, for a billion dollar project) we will now have >25% dilution. Once we are producing (and have paid back the capex debt we will incur), we'll be trading way, way higher. Buying back those 25% at say $2 would cost us 200 mio $. Doesn't make sense in my book ...
    On the contrary, now would be the time (except for the decision to go ahead with the stupid FEED) to do a buyback, selling them later back to the market for a profit once the permit and first financing deals get anounced ...

    Getting DZP into production is the priority IMO not delays and/or excuses. One delay will always lead to another as will excuses.
    IMO, shareholder value comes first. If the math doesn't compute, it does not make sense to push a project just to push it.

    Progress is a good thing and we need to trust that Management have our best interests in mind. If you want to avoid dilution buy in after the open, if you leave it to late I feel you will miss the chance of ever buying in under $0.30 forever.
    You may well be right there. But for the time being, I don't trust management enough to spend even more on Alk ...
 
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