Ore processing agreement

DCN have announced they will close the Mt. Morgans mill and not treat 3rd party ore. Not surprising I guess, if they really wanted to keep the mill making money for shareholders they would have sorted mill feed last year. Scratch that as a plan for some Cardinia ore it seems.

The other options for free milling Cardinia ore which is ready to go, subject presumably to securing a mining contract, are I understand St Barbara at Leonora and Red 5 King of the Hills. The latter is much bigger, but it seems they are not looking for outside ore in the short term.

SBM is a smaller mill, but it is not making money atm ... AISC of around $2700 so they are hauling that ore up from 2km underground for nothing atm. Down the track the plan is to merge with GMD and process Ulysses ore, or failing that enter a processing agreement with GMD. Ulysses doesn't yet have a maiden reserve, only a resource, so it seems ambitious to be providing ore in FY 24. Seems possible that in the interim SBM could be better off coming to an agreement with Kin. Interesting the SBM board think it is appropriate to negotiate just with GMD ... if I was an SBM holder I would want them finding the best deal, which you don't do by announcing you plan to reach agreement, with just one party, before the deal is done. In my thinking that is like announcing you plan to buy a house and then trying to negotiate on price.

In shades of current events at GMD / SBM DCN merged with NTI (Redcliffe, immediately north of Kin's Mertondale deposit) a few years ago, and brought in a hero MD with a track record or turning companies around. Didn't pan out. DCN are now vaguely looking for an outside mill for Redcliffe ore. (In a resource based Leonora consolidation Redcliffe would be a good fit for Kin at least superficially, taking the resource to about 2 million ounces.)

Here in the cheap seats there is no way to know what is going on at the corporate level, but it is clear the Leonora area would benefit from better alignment between resources, capital, and milling capacity. It could be in the end Kin has to build a mill just because the wheeling and dealing swamps straight commercial negotiations. Shame those DCN shares can't be swapped for Redcliffe ... that would give Kin the extra 600 k oz needed to make a mill a better option.