Morning all, The investment case for ALK at this juncture stacks...

Morning all,

The investment case for ALK at this juncture stacks up remarkably in my opinion.

I have watched alkane for years and ironically, we are at the cheapest end of the 20 plus year trading range right now and by far the strongest position they have ever been in as a company.

So, lets break this down and have a look.

Market Cap- $107 million

Liquid assets Cash/bullion- Estimated now to be 90-100 million dollars

Other Assets= I don’t know this figure exactly but its sizeable (millions) and includes cattle/Dubbo land holdings that hosts deposits/plant/ IP etc.

Enterprise value using only liquid assets = between 7 and 17 million dollars

Enterprise value using liquid and other assets = negative EV or at best low single digit EV

This is where it gets very compelling the market at this very point in time is essentially valuing the company at an EV of only 7-17 million dollars and that’s using ONLY liquid assets in the calculation if you want to be less conservative add in the other assets and you could potentially be trading on a negative EV, which is absurd.

Now given the job advertisements flagged yesterday for the pending underground gold mine extension its quite evident the underground decision to a large degree has been made. I would expect this material event to be announced very near term as it states on the advertisements starting in January. This is IMPORTANT information as when they announce this and confirm, the market will go from neutral stance valuation which is NOW ONLY backing liquid assets and a very small EV to including the future of underground earnings and projections hence I see a sizeable re-rate. Its Capex is nothing compared to our cash pile and looks to have quiet lucrative metrics potentially better then open cut.

Now the rare earths projects as of about 18 months stopped being an intense capital drain and is simply awaiting the off take/financing. This is fine as the company at this point has NOT got a cent of value in the current valuation appointed to it by market so I and most analyst will probably just view this as immediate upside when it has a breakthrough but for now its value is not really considered in the company’s valuation. Basically, its a binary event for value to emerge at any time and at worse it sits in the background using little cash and no value attributed so its all upside little downside in my view.

Hope this helps please assist in this debate if I have this wrong.

All the best.