Far East Capital Newsletter
Alliance Resources - an interesting strategy for investors
26 Oct 2019

In This Issue


Alliance Resources - an interesting strategy for investors

Markets have continued to move either sideways or without much conviction as the forecast economic slowdown weighs on peoples’ minds. Is it fully priced in yet? One fund manager from Europe surprised me by stating that there were actually signs of an upward turn appearing in that part of the world. It is obviously embryonic, so we need to watch and see if it can be reflected in wider numbers.

The IPO market (for large companies) is taking a backward step in both the US and Australia as risk aversion is taking hold. Reading about the numbers for We Work leaves me scratching my head. What sort of fantasy land were the promoters and investment banks living in? Sure, the bigger the deal the higher the fees that can be charged and that is what motives investment bankers, but there is a limit to how far you can push the “bigger fool strategy”. The market over in Wall Street can certainly do with a reality check.

After a number of years licking its wounds, AGS is making comeback as a successful gold explorer and soon, an emerging gold producer. So far the resource is still modest at about 250,000 oz, but the grade is usefully high.

You need to look beyond the resource as it stands today, and take a view on what has been happening corporately. In mid August, Gandel Metals launched a takeover bid for AGS, at 14¢ a share. 

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