Hey Rewop.
I do not know much inside information, but just for pure interest I can share a little background how I became into ARL and share my POV, why I invested in it.
I've been in the crew, which was drilling in Goongarrie. I remember we had to drill around 75 holes and half of them were finished by starting rod (AC drilling, starting rod 3m), which means we got the sample in 1-3 meters already, very very shallow holes. Rest of the holes we used hammer, because geo wanted to dig in deeper but even those holes were up to 15 meters. We also saw numerous holes, were asbestos occurence appeared (which is positive sign actually, because where is lots of asbestos, there you can assume good nickel grade). Plus we also drilled holes to see where facility and mill to be located. Found that place as well. Our next program was at EMU lake, september 2022, where we drilled 24 holes, most of them were also shallow, about 20-34 meters ( there should be ASX announcement for that as well). So the other tenements are coming with very very low cost per tonne as well, because product is so close to surface. I already heard back then, oct/nov 2022, that deal is coming and one car manufacturer will be investor but that source didnt say which company. He knew, because he was operations manager in the drilling company and his wife works in ARL and owns stocks as well.
But news actually came out way later, which shows that they only share announcements, when they are worth sharing and everything is certain. Im sure deal is coming and I feel somehow that Mitsubishi gets all the production and consortium has JV possibilities in future projects as well. These three will go hand in hand all the way, just have a feeling like that.
I've been huge fan of current shares on issue etc. My darkest assumptions for company, which I am still confident to keep investing, have been: 1) total shares on issue (without split) - 1.2 bln. 2) ARL stake in Goongarrie project >=40%. Shares on issue over 1.2 bln needs different approach, why is that ? And whats the mkt cap ?
PFS says EBITDA 800 mln per annum. Im not really expert here, but what would be possible profit after that ?
Everybody has been so stuck on nickel price, seeing mines closures and whipping nickel as metal and counting it down. Why ? Why ? Why ? I dont care if nickel hovers over 15 000 $ to 18 000 $ next 5 years. Right now I've been totally unaffected about nickel price, its competition and dirtiness in my investings into ARL. I dont care about it at all. Why ?
Lets assume nickel price will hit PFS shown price 25 000$ per tonne and ARL gets 40% of the project - their net annual profit would land somewhere 210 mil (My assumption, please correct me and bring out your calculations). Like couple of days ago, company was worth 70 mil. That is 3 times less what they can generate annually. That truly shows company is undervalued. If they should get 210 mil per annum + have been analyzing different ASX mining companies, that should take company valuation somewhere 1.2 bln and with current shares on issue - 6$ AUD per share. But they definitely will issue new shares, hopefully not too much.
Now nickel price has dropped and lets assume they'll make 80 mil per annum net profit. Thats as much as company mkt cap right now. It definitely gonna rocket and takes mkt cap somewhere half a billion.
I finished my last swing at Cosmos, IGO nickel mine and they terminated all the contracts. My drillers dad worked at Heron with Buchhorn. Initially they were after gold but found massive nickel deposit. He describes Buchhorn as really greedy guy. And if he is in heavily, thats clear indicator. Plus management has kept shares on issue low. I reckon that might have ties with future dividend payouts ( shareholders are not too diluted) + every positive announcement pushes stock price higher, which makes it way easier to accumulate extra capital. Theresa huge difference if approach is made of 197 mil shares on issue or 1 bln shares on issue. I consider management as absolute professionals and they are sailing that ship really far
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, there’s a lot there and certainly good to hear from someone with hands on experience.
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