It's hard to work out what is going on with the share price at the moment, especially with our resident conspiracy theorist unwilling to dish the dirt.
I'm trying to stay focused on the resource and its valuation. After today's SP rise I reckon the gold in the ground is valued at something in the mid 70 cents per ounce, on ounces/enterprise value. Admittedly it's a bit out of date but Bell Potter's review from December 2020 had an average for explorers at $122 per resource ounce. That is ballpark for the DCN acquisition of NTM's ounces next door to Kin in November last year as well.
Kin probably got a bit ahead of itself in Q4 last year at $127 an ounce, according to the same Bell Potter numbers. But it has fallen further than most since then at a time when almost all the explorers are down with the decline in the gold price. That's been the noise in the sector, meaning that Kin hasn't received any real bump from increasing the resource to 1.15m ounces in mid-December. Then we got stuck in the capital raise, which was poorly timed in hindsight, effectively anchoring us to 13 cents and lower.
The comforting thing is that the insiders went in heavy again at 13 cents, so they see must see upside ahead. We also have the next resource update promised by the end of the month, plus the start of a stream of results from the latest phase of drilling. Hopefully that is going to coalesce into the market starting to appreciate the higher resource at a higher valuation per ounce, especially if gold can reverse some of its recent declines.
Kin is still a buy for me.
KIN Price at posting:
13.0¢ Sentiment: Buy Disclosure: Held
