KML should have shipped about 1 million tonnes of IO during the last quarter. The report will confirm this. Given an average price of $100 a tonne this should have put another $100 million into the KML accounts on top of the $110 million plus additional $100m loans in there. I expect they will be not far off break even for the mining operations/IO shipments and therefore the cash remaining should finish off all commissioning and remaining construction activities.
Given this you would have to expect a colossal blow out on the cost side. Even the 200-300 staff and equipment and any remaining activities shouldn't be costing them anymore than a few mil a week at max. All major capital purchases will have been made a long time ago so it is not like we will get a $100 mil surprise on that front. It is only the potential over run on commissioning/completion that would be of any concern and this at max would be significantly less than cash at bank.
We need a large upswing of confidence to wrestle this share away from the shorters/downramping and negative sentiment in the market. I think it is pretty obvious that all confidence is drained from GBG and people will be waiting on cash costs being posted in the half yearly in July.
Personally I am not that concerned. At current levels KML can produce ore for 100 years just on current resources and assets. It would sure be nice to see an uplift in price but it will take many small investors to push this through whilst the instos are holding it down. The whole thing stinks of market manipulation but eventually they will move on once the money has swung in the opposite direction and GBG gets a breeze behind it.
Just my thoughts after yet another shocker week.....great news and down we go. Maybe when we report a very profitable quarter we will go bankrupt!
GBG Price at posting:
18.0¢ Sentiment: Buy Disclosure: Held
