A quick look at that presentation suggests that SBM are in a...

A quick look at that presentation suggests that SBM are in a mess – lower production, less profit, and hugely reduced cash in 2021. Management under a lot of pressure to deliver improved performance or the board will have to act.

On the other hand, it seems to show that the Simberi and Atlantic prongs of their recovery strategy are first in the timeline for focus, before they activate more of their ‘Leonora province’ plan in 18 months time. That seems strange as the presentation shows that the Gwalia plant is going to be operating well under capacity again next year, which must be a contributing factor to its relatively high AISC.

The key question is whether it is going to be better for SBM’s bottom line to process KIN’s ore than to sink a lot more capex into growing the resource deep underground at Gwalia, or dredging up new finds at places like Tower Hill and Harbour Lights.

But KIN has got to be counting on some kind of deal with SBM, though, as this is the only way that the constant mentions of it being in the ‘early stages of exploration’ and ‘refocusing on exploration, the most value-accretive stage of the cycle’, also make sense.

More clues to that strategy again recently in the buy out of the Sprott royalty; the employment of the mining manager; and the mention of a metallurgical test-work programme on cores from Cardinia Hill in KIN’s latest preso...