Kingsgate down 21% on annual report results is spooking the...

Kingsgate down 21% on annual report results is spooking the sector.
Profit before tax and significant items only $17.2mill. No joy there if POG does not recover a lot more ground (2013 realised POG was US$1663). After significant items the loss was a whopping $323mill.
Compare that to MML’s NPAT of US$50mill ($A55.7mill) (released this week) in a year when they had;
Multiple delays caused by a very old mill (now replaced),
Unusually heavy rain causing significant reduction in production due to tilted leach tanks,
Fire in a shaft reducing capacity,
Lower average grades due to aggressive development work to ready the mine for the expansion,
Less ounces produced as a result of all of the above and therefore lower revenue and higher cash cost per ounce.

Despite all of these problems, a NPAT of US$50mill or A$55.7mill from just 62koz and the profit is after a $6.8mill write off of exploration relating to the relinquishment of the Anoling project.
NP before that write off would have been US$57mill or A$63mill which works out to a profit margin of A$1016/oz. Using $US57mill profit (before one off non cash $6.8mill write off) the profit margin is around $920/oz so “all in cash costs” allowing for everything including exploration, admin and non cash depreciation worked out to US$690/oz.
If all in cash cost can be as low as $690/oz on the production of just 62koz with all the problems of last year, then on production of 150-200koz/year, all in cash costs should be well below $600/oz. $450-550 might be more likely. $1000 margin on just 150koz after ramp up would be US$150mill NPAT or A$167mill. With the mc now at 489mill the PE will be just 3.4. On 170koz-200kozz, the PE would be quite a bit lower. Even on the very conservative 150koz/yr, this stock needs to double in sp just to reach a PE of 6.8 on these numbers. The sp could triple for a PE of 10 in expectation of a gradual improvement from 150koz to 200koz to bring the PE back well below 10. A $7.65 price target seems reasonable following the annual report results.