About to Launch KDR-Big Buys on the Screen !!!, page-12

What a Gas,

Sorry for you if you bought into the 80cent spike when they were first drilling Home of Bullion. If you did you may have unfortunately over estimated the value of that early exploration success. The falling copper price and general market conditions will have made it a prudent decision by the directors to scale down work at HOB and find other projects with more potential to create shareholder value. I've had a very quick look over past announcements and what I see is a company that is prepared to have a go and move quickly to adapt to changing market conditions.

They have described their gold acquisition as a game changer and in my opinion it will be as long as they can find sufficient high grade ore to give this mine some longevity. No point having a mine without an ore body. The initial mineral resource of 99,000oz at 5.6g/t is a very good start and we await the outcome of more resource drilling. The discovery of more ore is the unknown and therefore the reason this stock remains speculative. If they find enough easily accessible high grade ore the future of the mine is likely to be secured and its cash generating potential should also be good going by the current grade of the resource.

Remember also that Home of Bullion, Cowal Creek and Brown's Reef are still assets of this company. These exploration projects are well advanced and should the company generate good operating cash flows from Coolgardie they may decide to apply some of those funds to the continued development of those projects or they could also look to farm these projects out and sit on a free carried interest. You may want to read one of my previous posts from this week about Glencore's sale of its Cobar copper mine. This sale may have potential to focus interest on all exploration properties in this geological domain. What is more, we are currently suffering a major commodities slump with the price of most base metals at long term lows. It is not clear yet if this cycle has bottomed yet but the Glencore debt tantrum and the closing of their copper mines in Zambia may indicate a bottoming is not far off, in which case if prices improve our exploration assets may become more marketable and we may later down the track either decide to develop them, farm them out, or spin them out into new IPOs.

Unfortunately the exploration and mining game isn't predictable and it doesn't proved nice easy linear pathways to development success. If it was that easy we would all make money, every time, giving money to anyone with some moose pasture and a drill ready to poke holes in it.

Sit back and pray for high grade gold to come out of those drill holes at Coolgardie. If it does you might see your 80cents back sooner than you think.

Eshmun
IMHO DYOR