Alio Gold Inc. T.ALO

Ana Paula is insanely undervalued. Alio is now deep value.

[asforecasts]

I bought in after 3rd qtr financials cratered this stock but stepped out of half when I saw the $70mil impairment of Ana Paula.  I've been looking at the technical report and believe that mgnt has mispriced this asset.  Market cap to tangible book value based on a reasonable valuation of AP is .25.  The market is valuing assets at 25c on the dollar.  Getting Florida Canyon to even subpar profit is a 3-5 bagger.  I only hope mgnt does not sell AP.  Appears that Backens is a very conservative guy and could be smart enough not to screw the pooch.  Second leach pad ramp up  in 3 to 6 months should get them into volume to spread out fixed costs.
Anyway, back in my full initial position.

[PianoMan]

It may be difficult for Alio to put meaningful dollars in Ana Paula for a while. But they Leagold (LMC) Los Filos mines is 1 hour drive from Ana and Media Luna for Torex Media Luna mine is 90 minutes away. I can see multiple angles how a deal can be made as Ana is an open pit to begin with. There are ways to leverage this asset which is completely ignored by the market right now. 

[asforecasts]

Yes, they will not develop AP for awhile.  Once mgnt is confident on cash flow from Florida Canyon they can start thinking of debt to develop AP.  There is no debt on balance sheet now.  Waiting on cash flow to pick up to the point of financing AP development is probably not realistic.  I hope they don't stream or partner.  Partners tend to get the better end of the

[sclarda]

asforecasts wrote Yes, they will not develop AP for awhile.  Once mgnt is confident on cash flow from Florida Canyon they can start thinking of debt to develop AP.  There is no debt on balance sheet now.  Waiting on cash flow to pick up to the point of financing AP development is probably not realistic.  I hope they don't stream or partner.  Partners tend to get the

[asforecasts]

Sclarda, Thanks for the reply.  My figures are quarterly, not annual.  Cash flow will be good but they will need financing to develop Ana Paula.  

[sclarda]

asforecasts wrote Sclarda, Thanks for the reply.  My figures are quarterly, not annual.  Cash flow will be good but they will need financing to develop Ana Paula.   -------------------------------------- Yes your cashflow projections appear near mine but they will not be producing 24 000 ounces per quarter as they are only projecting 72 000 to 85 000 which would equal max. 21 000

[asforecasts]

Yes, I made a couple of assumptions The second heap will not be fully operational until late Q2.  Looking back on the last normal quarter, Q1 2019, single heap was over 12,000oz.  Hence my focus on quarterly data rather than annual, to project the new normal after the pit problems are resolved, all equipment is online, the second heap is humming.  I see 24,000 per qtr easily after

[sclarda]

asforecasts wrote Yes, I made a couple of assumptions The second heap will not be fully operational until late Q2.  Looking back on the last normal quarter, Q1 2019, single heap was over 12,000oz.  Hence my focus on quarterly data rather than annual, to project the new normal after the pit problems are resolved, all equipment is online, the second heap is humming.  I see 24,000 per

[asforecasts]

You got it.  I normally trade gold stocks according to my gold timing model but I think ALO is a hold through the next cycle.  Just to see if they get the dominoes in line we should own the stock.