Self-Imposed "Time Out"... I had to take a self-imposed "time out" after the RPM acquisition was announced. I was absolutely taken aback and upset by this acquisition and did not support it at all. My issue with it was two-fold:
- Management strayed far from the socialized business plan. Push AP to production while managing SF.
- RPM has no proven or reliable history, FCM is based on a PEA and the pain of starting operations was ever-present with Florida Canyon Mine.
The biggest hurdle I had was to get over the seemingly "out of left field" change of direction and priorities. Once I moved past this, and evaluated the acquisition and assets, read RPM's filings, I soon felt this was a good match and offered shareholders much potential. I am now 100% behind it, although it effectively has made my warrants worth zero.
The next week or two will be huge for ALO and RPM. Both should release production resutls and while I expect ALO relatively poor (18-20k), if RPM can produce out 15koz, the market will start to wake up and look at this transaction differently. I believe this, along with Torex, is the reason we are seeing a turn to green (which imo will be a lengthy run up).
Looking ahead to Q2, ALO should have a strong Q with 25K+ oz, and RPM 15K oz.. We're looking at 40k oz at AISC around $1017, so at $1320 gold, we have$12M profit. The potential to grow output in 2018 and 2019 is significant.
Meanwhile at AP, I can see them widening the pit to include the south resources which would allow for a deeper pit. The south and depth will be a "game changer" for this deposit, but I don't see them finishing the FS until 2019 now.
So, a change in expectation was required on my end. This is better for the company long term, but a kick in the teeth to the warrant holders and any short term speculators.
B