Hello Agiotage,You stated "next news could be final mining...

Hello Agiotage,

You stated "next news could be final mining approval and go ahead for geolsec ! rock on "

In my humble opinion, the timing for the MP (Mining Permit) grant is about right now. After considering the time for submission, public review for comment period, resolve objection if any (none so far), surveying, approval of surveying, etc. I do not expect it will go beyond the end of this month.

Once it is granted, KOR need to submit the MMP (Mining Management Plan) and that may take 2 to 3 weeks to be processed by the NT mining department.

The next news to be announced could also be one of the followings:

*Melrose resource upgrade;
*ASIC grant the relief for not having prospectus before the EGM to approve in specie distribution for the two gold projects;
*Resource upgrade for Bobrikovo mine after the maiden JORC resource of 960,000 oz gold to include additional data obtained since October 2009;
* Historic drilling results of Sundane gold and Sundance East gold prospect with some excellent results such as 9m @ 2.1 g/t, 14m @1.9g/t, 12m @3.g/t, etc) in NT .
* etc, etc, etc at least 5 more items

The importance of cash flow of the Geolsec project to support Bobrikovo and Melrose gold projects, if the two IPO are delayed or not going ahead, may have been overlooked by many KOR share holders.

The economics of the Geolsec project

First year production in 2010 with a targeted of approximately 15,000 tonnes per annum to generate a projected pre-tax gross profit of A$ 5-6 million, or between A$ 0.073 and A$ 0.088 a share.

It will be targeting a second year profit of A$ 9 million, and A$ 12 million in the third year of operation.

This represents a targeted gross profit of A$ 26-27 million over 3 years commencing 2010 subject to there being no capital dilution and to meeting the targeted sales revenue and operating expenses, the revenue stream represents a potential gross profit between A$ 0.33 and A$ 0.34 per share on a fully diluted basis.

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If the Bobrikovo IPO is delayed or not going ahead in the medium term (eg due to market condition, etc)
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Gold production in 2011 will be targeted at 15,300 ounces of gold in concentrate for a pre-tax profit of US$c4.7 million at a 70% recovery grade of gold to concentrate and based on a gold price of US$ 900. The anticipated capital costs of the Project were in the range from US$ 2.2 million to US$ 2.8 million. The estimated operating costs including mining processing and overheads are US$ 280 per ounce. Korabs share of the profit was to be US$ 3.36 million (A$ 4 million).


The capital cost of the Bobrikovo project can be funded by the Geolsec first year profit of A$ 5 to 6 Million.

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If the IPO is going ahead (KOR shareholder will be entitled for in specie distribution)
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* The first year production target is 60,000 ounces of gold per year at an operating cost of $280 per ounce. The new anticipated capital cost is around US$ 5 million which will be covered from the funds raised during the upcoming IPO following the spin-off.
Korabs share of the profit (at US$1000/oz) will be approximately US$ 16-19 million (AU$ 17-21 million) depending on recovery rates of gold to concentrate.


Similar analysis can be done with Melrose project when the IPO is delayed /or not going ahead and when IPO will go ahead.

Hopefully the share holders can get the gist or drift of the importance of Geolsec project to Bobrikovo and Melrose gold project when they are delayed or not proceeding.

As always DYOR.