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Grade is what seems to move the share price, and with reason, because the higher the grade the less material has to be processed for a given number of ounces.
But grade is not the whole story. How much ore is there, and how hard is it to get at?
The shallower the better because there is less sterile material to be moved out of the way before ore is mined, and because shallow deposits can be mined by open cut. Say 200 metres would be deep for an open cut. 8 meters is basically on the surface.
The wider the better, because width points towards how much gold is there. gram meters (grade times width) is a good measure - 20 is good, as a rule of thumb. So 4 metres at 5 gm per tonne, or 20 metres at 1 gram per tonne would both be good. The more ore of a given grade the better - width is the first step towards answering: how much is there?
The above results are very good. Really shallow, close to the plant, and the lower grade deposits are wide. Note that two wide deposits go to bottom of hole, which means they continue beyond where the air-core drills can go.
So the for the first two results we have 46.4 gram metres from 8m, and 68.9 + gram metres from 4 m (keeps going beyond the end of hole).There are a few observations to make about Kin's SP, in no particular order:
1. I doubt the board will press go on the mill until the SP returns to something matching the value of the project. The main holders have deep pockets and it seems patience.
2. Kin has changed direction from aiming for a small scale plan with a second hand mill and ore from multiple small pits to a plan to be a more substantial mid-range producer, consistent with the size of the ore body which the board obviously think is there beyond the already established resource. Along the way the SP has drifted down because buyers went elsewhere, and Kin went off a lot of watch lists. Kin was the third largest mover on the ASX at the start of the week. The problem of announcements no one reads has probably now gone, and we can expect more movement on announcements.
3. By my reckoning most Kin shares will be tightly held - 60% are held by the main shareholders who all have board representation, and a lot of those remaining will have bought in at much higher prices and have decided to wait until the MC matches the project. So I surmise that as buyer interest builds the SP will rise because there won't be much selling because existing holders will regard the SP as way too low already.
4. With exploration drilling, there has to be follow to figure out how extensive discovered deposits are. ATM the Kin board seem to be backing the huge amount of work last year that went into re-interpreting the geology. They seem VERY confident about their modelling now, and by implication are quietly confident they know exactly what they are looking for with further drilling.
5. The sleeping giant is the large area Kin has under sediment - 60% of its tenements, mostly unexplored. We haven't heard what is happening with the Geo tech aimed at helping identify targets there, with good reason because the outcropping deposits are the lower hanging fruit. But there is more to come and my take is the board will play the long game.
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