I’m a Top 20 holder and have been in KRM since 2011. Fortunately I’ve averaged down since then and have been considering what the recent announcement and price rise means for Long Term holders.
As I see it, what is happening is part of a larger plan that the Fabian and his supporters have had in mind for a couple of years. His record, and theirs, are too impressive for us to believe that they have taken a serious interest in a small Indonesian gold miner.
Its Indonesian assets were of interest, but what they really wanted and found was a pool of underused money controlled by shareholders who were open to suggestions. (In this respect, I should disclose that this is conjecture, because I was certainly not involved in any discussions which took place.)
The Way Llingo and Talang Santo deposits have, when actually mined, proven to be little cash cows. It was some form of bad luck/mismanagement for the Talang Santo underground mine to be flooded. Clearly such a thing should not have happened and probably would not have had the company put in place normal precautions to control flooding; an event which was certainly on the cards in such a high rainfall area.
But the mine did flood and the company almost went under. But when those problems sorted themselves out and Talang Santo was mined as an open pit, the company became a little cash box.
No doubt Fabian and his supporters have had a number of prospects in mind for several years and that Porsanger and Penikat were only a couple of them.
Given their track record, I’ve got no problem in supporting them, but I would still like to find out about KRM’s own assets because their development might still be winners in their own right.
I suspect that the company will only reluctantly go underground at Talang Santo, if at all. The flooding is still an unknown and on a cost/benefit analysis, exploration of the Maul vein or the PGE prospects might be better ways of spending the money.
So what does a Long Term shareholder do?
I’m all for letting these blokes have a go and seeing where it will end up. It may be risky but if we were worried about risk we wouldn't be here anyway. This one has a lot of upside too.
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