Thanks for your responses.Almost certainly, the design of the...

Thanks for your responses.

Almost certainly, the design of the revived Chatree mine has undergone a major, positive, reshaping over the last year or so. The dynamics have changed, given a lengthy delay in the mine’s reemergence, a record and stable gold price at the top end, and a soaring silver price.

The outlook for the life and profitability of the mine has obviously improved markedly against a backdrop of surging precious metal prices. Meanwhile ,modernisation, and increasing the range, of vehicles used to extract and transport ore to the processing plants may well also help improve the profit margin and, in turn, the mine’s prospects.

An update on the JORC proved/probable gold resources, thanks to continued high precious metal prices, would be most welcome in the impending quarterly results. Personally, those are the resource figures that really count eventhough the mix of probable and proven resources does not have to be disclosed.

I would hazard a guess that the priority is to max the gold grade to max cash flow, even if shortening the life of the main pit a bit, in a determined drive to eliminate debt. What Kingsgate should do with surplus cash as it mounts is proving to be a rather vexed, academic problem at this stage.

For me, the main priority is to eliminate, or substantially reduce debt. Do buybacks to wipe out the dilutive effects of issuing options and warrants to financiers is another priority, if the opportunity arises. Also to use buybacks, if necessary, to support the share price, if it is under unjustified attack.

I agree with danbradster’s view, which I hope I am not misrepresenting, that management should focus on the longer-term profit outlook, through re-investment in the mine’s operations. Minimising costs where possible, and max profits through increasing production and plant processing capacity, if the expected ROI is greater than the return from a buyback. Along the lines of what leading tech giants have done so successfully. Eventually, a mix of buybacks and dividends would be most welcome.

I look forward, hopefully, to seeing nuggets of fresh, encouraging, data glitter in the quarterly figures today.