Gold is now at US$2,220.80/oz. Spectacular value.
KCN last gave guidance that Plant 1 would be in production end of March 2024. The next trading day is Tuesday 2 April 2024. KCN would be compelled to issue an announcement on 2 April that gives the status. I don't care what the status is, as long as it is accurately and clearly reported with enough information to evaluate when Plant 1 will be operational and higher grade ore is likely to come on line.
All we need is certainty. In time we can expect 120,000 oz/year of gold production. With an AISC of US$1,200/oz (is this correct?), this would amount to US$120m/yr. That is, AU$180m/yr. This for a company with a market capitalisation of $300m.
With 257,751,692 shares on issue, $180m/yr is $0.70/share/year in earnings. Assuming a P/E ratio of 8, this would mean a share price of $5.60/share.
To this there are potential upsides and downsides. On the downside there are equipment breakdowns, a significant drop in gold price and government instability. On the upside there are improved efficiency, improved ore grade, improved ore resources, improved gold production (it was 180,000 oz/yr in 2010 using the same plants) and a significant increase in gold price. Looks pretty balanced to me.
All we need now is higher grade or (>1 g/t) and both plants operating. Is there any reason that the KCN share price would not be circa $5.60/share once these happen?
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Mkt cap ! $407.2M |
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1 | 3485 | $1.57 |
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2 | 11622 | 1.560 |
1 | 1622 | 1.555 |
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1 | 10000 | 1.540 |
Price($) | Vol. | No. |
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1.580 | 6843 | 3 |
1.590 | 7232 | 3 |
1.595 | 6622 | 2 |
1.600 | 4594 | 2 |
1.625 | 610 | 1 |
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Change
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