I must admit that I have found the plethora of figures the company has produced over the last few weeks confusing. However, as I have said in previous posts, the key to this is grades. Grades until now have been lower than expected and have been inconsistent ? there is a lot in the annual report about this. The key announcement was that they reached the higher grade part of the ore body in Mar and revenues shot up, so I think we can believe them. I also think that, given past disappointments, they are being conservative with their forward looking statements, so that they can release future updates that exceed expectations. I therefore have full confidence that they will continue to ramp up from here to generate net cash in excess of US$4m per month, as costs and revenue are in US$, the relative strength of A$ does not impact this. Even with the SP in A$, at current fx, the current market cap massively undervalues the company. I do not see how the market can be missing this. I therefore strongly believe that it is the threat of dilution that is holding this back ? who wants to buy a share that could double in numbers over night for half what you paid for it? The statement that Jinchuan want to stay at 50% actually makes this more threatening as they would need to issue the same number of shares again to achieve this.
Painting renewal of the mining contract at a lower costs and selling a non core asset at a profit as negative, smacks a bit of having an agenda, rather than just presenting an opinion.
ALB Price at posting:
12.0¢ Sentiment: LT Buy Disclosure: Held
