Some of the trades over the last couple of weeks made me wonder in Kin were talking to brokers about underwriting. The first question for me is whether there is some underwriting at any stage. Dilution is bad, but running out of $ is worse.
I don't think the placement capacity is there for this to be a placement, given the SP, and the GM didn't approve additional placement capacity. So, if a rights issue, the second question is what the SP looks like when it is time to decide whether to take up shares or not.
There was a mention of a reserve estimate ready at the end of May, pending a PFS by the end of June. For existing shareholders, given the CR is likely to be at a discount to recent trading, I am hoping an impressive PFS (or at least an impressive estimated reserve) pushes the SP up before we have to decide what to do.
One criticism of the previous PFS / DFS was that the project was a bit small, financially to attract some of the deeper pockets. If the project can go north of 500k Oz on good AISC and higher GP we might finally see a re-valuing of the company. Hopefully before a rights issue closes.
Regarding some of the criticisms. The directors fees are in the $35k to $50k a year range. Not excessive or unusual. MD is paid more, but that is how it works when you are in trouble because an MD jumped ship and you have to recruit a safe pair of hands. We have been kept closely informed on what expenditure has been, what it has been for, and the reasons for it, assuming we read the provided information. We also knew that the last CR didn't hit the mark, probably because of the Quixotic attempted board spill, and that project expenditure and funds at hand meant there would have to be a CR about now. We also knew that developing a mine requires investors to pour in money prior to any return - that is true of any mining development. I don't have much time for "who knew investing in a mining developer was risky?" or "who knew it is painstaking and expensive to go from exploration drilling to production?" posts... I am sad about the SP, but it was my decision to chase high returns in a small explorer/developer, and the story is not over yet.
Fingers crossed for an impressive PFS before a rights acceptance deadline... preferably with gold soaring past $2k
KIN Price at posting:
5.8¢ Sentiment: Hold Disclosure: Held
