Short Term Trading Weekend Lounge: 21 - 23 Aug, page-27

STTCOMP ALK FA Long

ALK Alkane Resources (Gold NSW)
MC $670M
SP ~$1.14
Cash in bank ~$90M no debt.

Alkane is currently doing follow up deep drilling of the Boda porphyry Au/Cu discovery. The company expects assay results "at the end of August" .... so sometime in the next couple (few?) weeks. It was this discovery which set off all of the nearology plays in the Lachlan Fold in NSW in recent months.

The situation, as it stands, is the initial discovery hole looks good but it's not yet confirmed as a commercial deposit. The company needs to find a large high grade core. The current drilling is targeting what they think is the core.... from a SP perspective if this drilling is successful it derisks the project and the value becomes more obvious. An undeveloped porphyry like Boda, if commercial, is easily worth ALK's current MC...
Deep drilling can be hit or miss so there's some downside risks involved if this hole is off target. The buffer is ALK is expanding its existing gold mine and there's plenty of intrinsic value in the company.

Disclosure... l hold ALK