Maybe the comparison is the nearest that they could find among the Australian producers. BCN's production is roughly the same as the planned KAU production, but the BCN AISC is significantly higher, and the BCN market cap is about 4 times higher than KAU, so as a comparison KAU looks much better (and I also have a holding in BCN, so I'm not being biased).
This restructure and reorganisation of the KAU operation looks very positive to me. They need to get into seriously mining the A1 virgin ground where the high grades are believed to be, and also put more focus on exploration around Maldon, and in particular around the old Nuggety Reef mine. They have a much expanded exploration tenement there now, and while I have high hopes for A1, I have even higher hopes for the Maldon project.
Increasing the tailings capacity is an important step, as other posters have mentioned, and as well as giving them extra processing capacity for their own ore, they will be able to offer toll treatment deals to other producers. The Maldon plant has only been operating at about 35% capacity, and a permitted mill is a very valuable asset in Victoria, where getting through the plethora of regulations and permits makes it almost impossible to get a new mill approved.
Overall I believe that this ann is far more positive than many had expected, and it sets KAU up to finally start to produce the high grade high profit ounces that we have long thought to be there for the taking..
KAU Price at posting:
14.5¢ Sentiment: Buy Disclosure: Held
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