Kingsgate management has done the necessary and raised enough cash to make the company a viable going concern again.
It is clear that the company has been casting around for cash in the last few months to restart the plant and now needs working capital to ramp up production. Hundreds of employees have been rehired, stocks of consumables replenished and maintenance conducted on a plant that has not been operational for 6 years. Think of all of the machinery that needs to be fired up again crushers, conveyors belts, trucks, electrical equipment, storage tanks, et all. Tens of millions of dollars is required.
All of it needs cash and if the company wants to get to full production it needs to raise finance as best it can. The Thai government has dragged its feet throughout this process over the past 18 months since Kingsgate first announced it wanted to restart the plant. Management has done well to get the plant restated on the smell of an oily rag, with little resources or capital and being stymied every step of the way by the Thai political process which remains messy.
Give management a break. No one likes dilution but they have done the necessary. Full production can now ramp up with gold at record highs and TAFTA is in the back pocket still.
KCN Price at posting:
$1.50 Sentiment: Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)