Firstly , I want to say that this only my research trying to put some pieces together and it could be way off the mark , so do not take it as correct but simply me trying to join the dots , so DYOR .
I couldn't help thinking that there had to be a lot more to the SBM strategy than just "filling the mill" during a 2 year slight hiatus in own ground production.
So I went back and watched one of the best pressos I've seen on a Goldie. It was on St Barbara from June 2020 by the ABC (remember these timelines) :
https://www.abc.net.au/news/2020-07-30/expansion-of-gwalia-gold-mine-nearly-complete/12503984Watch the 3D video presentation and visualize where KIN tenements are as the presentation progresses.
SBM are going deeper and extending the underground to the south following high grades at significant depth following the granite interface.
From the KIN website on Desdemona , the Sons of Gwalia mine is only about 2.5klms north of the KIN tenements .
SBM are following the high down dip grades but are approaching the KIN Gwalia South , etc., tenements be at significant depth .
KIN does not have the funds to drill these targets at this depth , so for the moment is looking for higher grades at shallower depths (which by the way they have been finding) .
The KIN website on "Desdemona" shows the following tenements only a few klm's south from the southern dipping trend of the Gwalia Shear Zone / granite interface at depth mentioned in the 3D presso. A bit of mathematical interpolation would have you think that they are approaching the KIN tenements in plan view ?
So SBM's buy in of nearly 20% is obviously a stategic move on several fronts with supplementing their own mill capacity over the next 2 years or so suit production figures , while KIN continues to use their money to increase the resource estimate and all the while have a very good poker hand with an eye on a bigger prize that they are following at depth and trend ?
Do the maths on the angle of the SBM decline / drift and see where you end up on the surface ?
After viewing the SBM 3D presso of just 12 months ago , consider the negotiations and sale by Harmanis and the mention of the 1600m below surface on the incline mentioned in SBM annual report I think it was.
SBM adding future value :
Then from the KIN website is the Desdemona breakdown noting Gwalia South and Annapurna information which noted some very high grades from "limited" historic drilling but certainly not at the downtrend depths along strike that SBM are following ?
and finally a general comment from from SBM 2020 Annual Report :
In my opinion , I have come to the conclusion that SBM cannot go wrong and the timing is perfect with KIN !
- A capital raise in the wings with KIN shareholders paying for the majority of continued drilling going into 2022
- An updated MRE now within weeks which will edge the known reserves closer to 1.5M ounces
- Shallow high grade ounces readily available to maintain mill capacity in the short term (i.e., 2 years)
- A 20% foot in the door with the ability to buy down the buy in price in a CR.
- And having the knowledge and data at depth of a very high grade trend that appears to continue under the KIN tenements , but at a depth that the explorer cannot justify to shareholders either exploration wise or financially due to the depth and limited historic data available .
Is this the real eye on the prize ?
Very good luck to all holders (and future holders) who are able to read the tea leaves as this story finally comes together in my opinion .
My own research , certainly not financial advice and only reading information that is available to all .
I am starting to get a warm and fuzzy feeling however it no doubt is in some interests to have a good CR value before "rewarding" (for want of a better word ) the big investors and sophs for their loyalty.
Not saying that will happen but from experience it seems to a trend following CR's with all companies ............Lol !
Cheers
(20min delay)