Post by
templetooth2 on Aug 09, 2018 2:38pm
Way undervalued???
That seems to be the impression of most here. I am on the fence, waiting to be convinced that the Rye Patch deal has or will have any value whatsoever.
Just ballpark numbers from a memory that's getting hazier by the year, but Alio was a nice little company at year end 2017 with cash of $50 mil. and the plan to use that cash and the next few years of cash flow from San Fran to develop Ana Paula. AP financing would have required around $100 million of borrowed money, but we were well on our way to having the equity side all wrapped up.
Then Q1 was disappointing with indications that San Fran would continue to burn a modest amount of cash for a while. And, the plan changed at Ana Paula, or at least the timetable changed to allow for a bunch more underground drilling.
But then we go and blow our cash on Rye Patch, a very low grade deposit, much like the problematic San Fran.
Before you can say that Alio is way undervalued you must have a high degree of confidence that the company can accumulate a fair little pile of cash over the foreseeable short term future. Compared to where the company was a short 6 months ago, they have a LOT of catching up to do. Until proven otherwise, I look upon the Rye Patch deal as three steps back as in "one step forward..."