Ann: Thailand Update, page-106

HC is great for the knowledge base out there (both from users and the Don’s KCN news service) and different perspectives offered. Notwithstanding this, HC gives me the sense of being a teenager in an online chatroom, lots of predators pretending to be friendly with significant agendas of their own - namely f*ckng me (out of my shares)!
New users be aware as it takes a while to judge those who are genuine and whose opinions are both real and actually know their stuff, and the rest. I think I’ll call them predators going forward, as that’s what they are.
As general guidance, anyone spruiking an impending capital raise (CR) can be to a 95% likelihood be ignored. Even in their deepest, darkest hour, the BoD didn’t tap the shareholders but turned to Investec to lend them the money. In a worlds better position now (mine back, pouring gold in June), why would they dilute existing shareholders with a CR? Any track record or evidence to substantiate this CR idea? Nothing more than scaremongering. Given the share price, I hope they borrow an extra $150m and buyback half the shares. Bot Trade your way out of that Predators.

LoveGod is certainly full of the the spirit of the Lord, but he isn’t full of s*hit. I love calling out BS, (and posters have called me out once or twice before, nod to you, appreciated) but I am of similar opinion.
SO PLEASE CALL ME OUT HERE. REFUTE WHAT FOLLOWS….
With the TAFTA award in our back pocket (we must have won, we have the mine back, and the Thai Government wouldn’t be bringing us flowers and talking to us otherwise!) KCN have a 25-30 billion baht (circa AUD $1b, and whilst not official, this amount has been published many times, (thanks Don) in the Thai press, who have been very accurate so far) get out of gaol free card…valuing all other assets (Nueva Esperanza, plant and equipment etc) at zero, this implies a share price of $4.54. This is the worst case scenario.
What could happen to have TAFTA fall through?
1. The Thai Government simply refusing to pay. Given how dependent the Thai economy is on tourism and the crippling effect this would have on the government’s ability to borrow (as no bank would lend them money), this is highly unlikely.

2. Nuclear war - that will do it, but if that happens then I think we have more important things to worry about than Kingsgate. Despite all Putin’s rhetoric, world leaders have had enough common sense or self interest not to go down this path since WWII, so very unlikely also.

3. Natural disaster - earthquake, tsunami, Ebola plague etc that would decimate Thailand to the extent that would allow the Government to not honour TAFTA, as the country was in the midst of a catastrophe and it wouldn’t be in the national interest to do so.
4. Anything else? Meteor from space taking out Thailand?

Barring 1, 2 3 or 4 occurring, Kingsgate should be valued at $1b ($4.54) minimum by the market. RSK could have taken the award, but there is a much larger prize on offer, and all the instos know it.
Even with annual production of only 200,000 oz (not 300,000), this implies a profit (profit is ballpark $1000 per oz, cost circa $900 per oz?) of USD $200m per year. So the current share price and market capitalisation is worth less than one year’s profit. A P/E ratio of 1. There must only be enough gold in Chatree for one year, after that it’s empty.

Predators have pointed to the share price and this being the worst performing gold stock on the ASX. Correct, it is…. but the share price movement has nothing to do with either the value of the company or negative announcements/performance/fundamentals etc….the opposite actually - the announcement on 19 Jan that they had been given the four leases back for 10 years with right to roll, effectively giving us our billion dollar mine back, resulted in the share price going DOWN…! Kngsgate is a really tightly held stock, and the daily volume traded during this decline is frequently less than my holding (notwithstanding the chronic market manipulation and churning with the left hand selling to the right). The share price is meaningless as the movement isn’t confirmed by volume or driven by announcements.
I am seriously tempted to mortgage the house and put the lot on Kingsgate…..barring anyone calling me out and poking holes in my valuation above

Lastly, don’t think the half yearly accounts will contain much, as they two key announcements occurred in January and so won’t be reflected on the balance sheet. We will likely have to wait for the next quarterly report to see the write back of the assets.