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Equity Bottom-Up

<p>Alkane&rsquo;s (ALK&rsquo;s) recently announced revised execution plan for the DZP provides for a significant re-rating of the project&rsquo;s value. We calculate that the new modular design, where two trains of 0.5Mtpa will be constructed between end 2017 and 2023, will yield the same 1Mtpa size project as before but by using a staged capex spend will result in a c 16% uplift to our fully diluted (at a share price of A$0.40) DDF value of ALK&rsquo;s shares. We view this plan as pivotal to the DZP&rsquo;s successful execution and something that reduces risk in a multitude of areas, such as lower financing risk and construction costs from building components in lower-cost jurisdictions. Customer participation should also be improved by lowering commitments in off-take agreements geared to initially smaller production.</p>

Alkane&rsquo;s (ALK&rsquo;s) recently announced revised execution plan for the DZP provides for a significant re-rating of the project&rsquo;s value. We calculate that the new modular design, where two trains of 0.5Mtpa will be constructed between end 2017 and 2023, will yield the same 1Mtpa size project as before but by using a staged capex spend will result in a c 16% uplift to our fully diluted (at a share price of A$0.40) DDF value of ALK&rsquo;s shares. We view this plan as pivotal to the DZP&rsquo;s successful execution and something that reduces risk in a multitude of areas, such as lower financing risk and construction costs from building components in lower-cost jurisdictions. Customer participation should also be improved by lowering commitments in off-take agreements geared to initially smaller production.

Staged DZP plan de&#45;risks financing and off&#45;take

Australia

Alkane Resources Ltd. explores for and produces metals and minerals.  The Company produces gold in the Wyoming I, II and III projects, and the Caloma, Peak Hill and Wellington properties in New South Wales; and zirconium, hafnium, niobium, tantalum, yttrium and rare earths at the Dubbo project in New South Wales.

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Alkane Resources (ALK AU)

Staged DZP plan de-risks financing and off-take

Alkane’s (ALK’s) recently announced revised execution plan for the DZP provides for a significant re-rating of the project’s value. We calculate...

Edison Investment Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Staged DZP plan de&#45;risks financing and off&#45;take

Alkane’s (ALK’s) recently announced revised execution plan for the DZP provides for a significant re-rating of the project’s value. We calculate...

Edison Investment Research

Staged DZP plan de-risks financing and off-take