kyrgyz election emboldens aussie miner to dig , page-8

A post I made "over the road" re possible KGL re-rating timing.

Many of us often talk about how a stock will have to be re-rated once the cash begins to flow.
I have said it often enough myself.
However in practice I find the re-rating happens well before that.
It's generally once the bulk of the risks are removed -either through advancing through pre-feas to FS stage or securing financing or, as I think the case will be for KGL, the market recognising the project will go ahead and political risk is perhaps not nearly as significant as the share price was earlier suggesting.

A classic example was one I have mentioned before-Andean resources.
I bought in when the market cap was 6 mill.
I liked the resource and the grades, but more than anything the exploration potential which looked excellent.
Like KGL, the market cap looked too cheap just on the known resource. There was plenty of "free" high probability upside not in the share price.
At the time, I got the same advice from everyone. The price was low because Argentina was very high risk, even though I didn't see it as that high a risk to justify the discount.
In the end the share price did not wait for cash flow. It did not even wait for financing to be locked in. It didn't really wait for anything other than the market recognition (that I couldn't understand why was lacking earlier).
That came with new management and the insto backing that they had.
That caused a very strong re-rating which later continued with the expected exploration success and cash flow studies.
The company was taken over with a market cap in the billions.
The price rose by a factor of 90 from my entry despite multiple share issues along the way, even though they were no closer to cash flows than what KGL is today.
The price often gets away from us when we don't expect it.
I took profits when I tripled my money thinking I could buy back cheaper later. Instead it tripled again.
It had one last pullback during the GFC to near my exit price.
The point is don't think the price will wait till just before or just after cash flow begins, and then suddenly quadruple or better over a few days. It won't be that convenient for us.
I would expect a strong uptrend to begin at some point probably when most don't expect it.
I think we may be seeing the start of it with the solid base building over the last 6 months of market weakness.
The longer the time of the base formation, the stronger and faster the rally may be, taking many by surprise as they sell looking to buy back cheaper as they have done previously, only to find this rally continues well beyond their exit price.
Perhaps a GFC event may give one last chance to get in later again like Andean gave, perhaps not.

Andean is just one example and KGL will probably not behave the same way, but I do expect the behavior I described above for KGL.
Of course that's just my expectation and it may evolve very differently but I doubt it will stay anywhere near this cheap till the cash flow begins.

One thing I would add to the post is this;
Most stocks re-rate before they get this far into the process, namely FS and financing.
Therefore I think the last hurdle for us to be strongly re-rated is the official go ahead for Andash.
Being this undervalued this close to production is why I believe the size of the rally may surprise many.