I read very, very closely the lateset short annoucement. I came across with the feeling that KGM can remain profitable at the current gold price (it was like $100 AUD less when the annoucement came out)... if the only pluck out the highest grade 'pods'.
So, to hear them say we are going to mine 13.5 k of gold buy the end of June at profitable numbers... then stop that open pit, tells me they will 'cherry pick' the best 'pods' - for want of a better word.
I really do not know how much of the reserve 'goes away' at 1400 oz, instead of 1600 oz.
This is why I think they mention underground and 'accelerating' other projects. I think they are simply saying... at 1300 to 1400 oz we only have 'some' profitable reserver and resource. I dont know if that 'some' is HALF what they had. Or 25% of what they had, etc.
I still assume the POG will increase. It is good the AUD is falling. I hope it continues to fall. I will have a lot of interest in new annoucements - to get specifics of what profitable means and for how long.
We can see SAR has cut back a lot on their development. They are going to go along 'half pace' for a couple of year. FMG just said 'we will not dig out at nil profit'. And yet the Chinese are sniffing around for any marginal produers at 1400.
Before last annoucement KGM was going to produce 25k oz this year, and I guess 50 oz the next year. Now it seems they will produce 13k in two months... then stop!!!!
KGM Price at posting:
10.3¢ Sentiment: Hold Disclosure: Held
