It's a hybrid instrument, but if you want to view it as a debt...

It's a hybrid instrument, but if you want to view it as a debt instrument that's fine as its a conservative assumption. However, Bowie, compared with a project finance facility it is unsecured, and does NOT include terms and conditions (hedging, production schedules, negative pledges, etc etc). Therefore, comparing KBL's convertible notes against peer 'debt' is apples with oranges. Just look at the mess SRQ got in with their facilities with Credit Suisse and JPMorgan.

Agree with you that underground mining always throws up complexities, but I thought KBL's story is about turning from marginal production to profit, not already being in profit. At present they are marginal with copper production, yet from reading KBL material, bringing the gold production in won't change the cost base but will generate additional revenue (which I presume to be profit).

One of the lessons I've learnt from investing is that the best company may not be the best investment. It's all about belief in the ability to deliver improvement that improves share price, and marginal companies can deliver improvement much easier than current top performers. If you you don't want risk, then don't expect return.