@RnR There is difference between a business going into administration because of floods, covid labour shortages in WA, rising costs and mining company customers falling over and a business going down because the chief financial officer messed up. Nothing suggests NA did anything wrong. Experience of adverse events is a good thing imho.
I think the appointment signals that Kin cannot be focussing just on building a resource atm because of the the M and A action in Leonora. We can't know what is going on behind the scenes, but I think I know this:
1. Kin building a mill would be a kind of a last resort and would have to be preceded by a big discovery. Given all the mills around in care and maintenance building another one would be high risk. Apart from anything else, cost blowouts and delays trying to build a mill atm are almost certain. And clearly trying to build a mill from a 40million MC would be a non-starter.
2. Kin getting ore through an existing mill is going to depend on the multiparty manoeuvring going on now. For example, GMD and SLR are fighting over owership of the SBM mill which currently is underutilised and could I think take some Cardinia ore. We don't know what SLR plan to do if they get the mill but a deal with Kin a possibility. Clearly there is an incentive to better match the ore around Leonora with the mills.
3. Kin / Delphi's stake in DCN could be worth more than Kin's current market cap. GMD got 80% of DCN very cheaply, but that doesn't mean they get the last 20% cheaply. In June 4 months will be up and they can make another offer for DCN without having to compensate the former 80% holders. And in June it will be resolved if GMD's bid for the Leonora assets succeeds or fails. If they don't get the SBM mill they will really need full ownership of the Mt. Morgans mill (DCN). If they do get the SBM mill they could process Kin ore, in which case Kin might have less reason to cling so tightly to its DCN shares.
4. Kin might look vulnerable to low ball takeover, but I think it is protected by Delphi. Delphi will keep funding Kin, it seems, regardless of whether other share holders pitch in.
5. Kin has ore which is free milling, permitted, and ready to process once mining contracts are signed. At some point DCN will re-start their mill, just down the road towards Laverton. Red 5 are planning to expand their mill, which is also close. SBM mill needs feed, and neither Tower Hill nor Ulysses (GMD) are ready to go. Similarly DCN don't have ore ready to go. A short term milling contract for some Cardinia ore would allow Kin to drill out the Eastern corridor properly and put an end to the capital raises which only Delphi participates in.
6.Kin was I think close to having a milling deal for some of the Cardinia ore which would have given us a revenue stream, but then GMD began its moves. It makes sense to me that Kin puts more resources into dealing with the corporate environment now to make the most of the cards it has to play, even though it is a small player.
Overall I think the appointment signals a necessary shift of attention. I suspect major shareholders are on board.
KIN Price at posting:
3.3¢ Sentiment: Hold Disclosure: Held
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