I used to like the KBL story. High grade open Pit with potential...

I used to like the KBL story. High grade open Pit with potential to find more of the same...whats not to like right?...Wrong...the debt levels are too high and there has been limited exploration success.

For management to convince me that I should buy into the stock, they will need to give me more than a vague outline of how they intend to deal with the bond holders in Feb next year and make some substantial discoveries.

One of my concerns is the low grade of Pearse North and the cost of development of the ore-body and cost of producing an ounce of gold. Simple arithmetic tells me that the cost could be as high as 2 times current costs as the grades are a third of what is currently being mined.

In addition to the development and production costs you have as a backdrop this looming bond holder debt and other debts that need to be paid back in an aggressive manner...the combination doesn't sit well with me as it is akin to a 'gamble' seriously, it's a gamble on whether there will be a discovery that is big enough and easy enough to develop otherwise i believe we will see another capital raising and if that happens then you then have to ask yourself if a consolidation of capital may be on the agenda...