Originally posted by ShanghaiBobby
I've got about 20+ reasons why I'm bullish on AMI, but this is the most solid reason:
- they bought Peak from New Gold for ~$54M AUD. New Gold spent ~$500M AUD developing the Peak mines. They mined Peak for ~4 months and paid off 100% of their purchase
with what they mined from Peak.
What does this mean? In effect, they bought a distressed asset at 1/10 the cost it took to develop it. It also means anything else they get from Peak goes straight to the bottom line, because it paid for itself. I wouldn't be surprised if Peak is a 20-bagger in 5 years. It's under-explored, well developed, and AMI would only need to spend nominal sums to tweak what already exists at Peak, to get a whole lot more $$$ in the long run.
Now, if we put all of this into a holistic perspective and imagine how much it costs to develop a mine, you'll know why it's inappropriate to compare ANW with AMI. Buying Peak was like the classic Benjamin Graham 50 cent-dollar, except it's more like a 5 cent-dollar... I almost thought they we're taking the piss when they announced they bought a $500M+ asset for $54M, and paid itself off in 4 months!
Anyhow, this thread is about ANW, so let's leave this here and keep it to ANW.
Thanks for the info on AMI. It sounds like it's hard to compare managements ability to deliver though. Doesn't sound like AMI had to do any studies, planning approvals or development and rather got an unbelievable deal where all this has been completed already. Granted they must be excellent value seekers and deal makers but it's different to defining a resource and jumping through legislation and government hoops.
In relation to Blisters original comparison to the two. It's hard to compare the two as they're at different stages of development, but I'd say you could draw some comparisons with assets and likely profitability and value, ANW are a few years behind though. With Granville production and first sales expected this qtr and exploration planned for LOM extensions and possible takeover targets near by; Taronga Stage 1 hopefully getting underway in the next qtr or two and developing DFS which will include further exploration on 100% own nearby leases proving up Stage 2 economics; then there is Kilkivan which is looking the goods and could end up being a world class asset.
I'm sure if ANW continue chipping away and progressing all projects as we hope and expect then they can be a +$1b company. Once we see some cashflow from G2 and further cashflow from T1 things will be moving a lot fast and more productively.
