Gold has held at this high level for 1.5 months now. Enough time for it to start flowing through to cash flow.
Compared to 3 months ago, it's +15%. That changes gross margins from 30% to 45% or something along those lines. Minus royalties (20% marginal rate?), so 30% -> 42% instead. 30% is an example starting point.
I don't care too much whether gold continues to jump. I mainly want it to hold up here for a long while. A jump would be a welcome bonus though.
Mining ore is finally starting, and the 2nd plant is finally starting. So before too long, production/revenue will be tripling.
It'll be nice if gold holds up here while that happens, plus the 30+ days for the cashflow cycle to catch up. So moving towards triple production, with +12% revenue multiplier (after marginal royalties rate).
But for now, it's a nice boost to margins, helping the quarterly cashflow to be as strong as possible, even if on low production, so making it easier to fund the outgoings (CAT, interest, debt repayments), and making us slightly less desperate for better funding or an NE sale.
KCN Price at posting:
$1.80 Sentiment: Buy Disclosure: Held
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