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KCN 25.5¢

important repost to asx forum

  1. alecfra

    3,447 Posts.
    Subject -to top $55 mill profit
    Posted 16/01/03 23:51 - 35 reads
    Posted by alecfra
    Post #14223 - start of thread

    KCN Kingsgate has now been mining just on 13 months. In about 14 days we shall hear the result for the last quarter, one can expect at least 40,000 oz plus some handsome silver credits, due to some very smart forwards Av price is expected to be approx $325-30USD.

    If we include the first few months with known Oz and profit, you can expect a profit for the first 12 months to be in the order of $55-8 mil i.e. about 80cps.

    Grade will be down but tonnage is up and there is a reserve/resource upgrade, which more than replaces gold, mined and will allow management to increase throughput by over 50%.

    The last few days have seen some selling but traders have been taken on by investors (me too).

    Kingsgate plan is to maximise profits in years 1-3 (this is not so difficult as the nature of the ore body is such that there is a few "bonanza grades" which were cut from original resource calculation. They are looking to expand rigour sly by organic growth and acquisition.

    At year 5 they must sell down half of the venture (the numbers are fixed as at Nov 30 2001 (the first pour date), although this was part of the original grant of lease (it does not include the increased reserves since mining started) the Thai Govt may not insist that this is followed. If they do then KCN will receive a compensation, which could exceed $150-175 mill. This sort of figure will ensure good returns to shareholders.

    As management comities to command respect from investors a continued updating and price improvement can be expected.

    My guess $4.50+ by end of March Q

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