The impacts of RSPT have been described in my other post "RSPT, Bobrikovo and Melrose". Every explorer in Australia needs to adapt and adjust to the RSPT. eg They can use the resource exploration rebate to do a lot of explorations. To name a few very successful SFR in WA and AMX in West Africa and many small companies surrounding or near them. Some of the explorers (SFR, AMX, DRM, TLM, etc) have done better than small producers (eg RMS, SAR, BDG, SBM, etc) in term of price appreciation.
Melrose and KORs (Geolsec, Winchester MgO and advance exploration targets in Western Australia and Northern Territory) can use the exploration rebate to do more active exploration and hopefully can also be successful.
Once the market settle down (due to recent PIGS debt issue) and with the impending good news such as,
* The gold price is moving higher and has passed the previous record high (about US$1234/oz). So the outlook for gold IPOs look better and it is a matter of "when it will proceed" rather than "if it will proceed"
* The notice of EGM (extra-ordinary General Meeting) for in specie distribution of shares for the new gold IPOs.
* The upgrade of Melrose gold resource that will add value to the IPO (A$4 to 5 millions to be raised)
* The appointment of underwriter and lead managers for IPOs. Two most recently listed gold /resource IPOs are still doing well. VKA/Viking Ashanti gold (26.6 million new shares 30c with priority to RSG /resolute share holders), listed 10 May 2010 still above issue price and trading 34c today and Hot Chilli /ASX code HCH, (issued at 20c, uranium, copper and gold advanced explorer with NO JORC resources yet in West Africa) listed on 4 May 2010, is still doing very well, "very hot indeed" =): and today at traded 28c. It shows that with Good underwriter/ lead manager and Institution support, a small company can still do well even under most recent correction (PIGS debt issue).
* The exact ratio of the free distribution (currently the range is for 1 KOR shares to get free 1.3 shares in Melrose shares and 1.3 shares Bobrikovo shares).
* The majority of top share-holders endorsement of voting for "yes" before the EGM date (similar case to UAU free distribution)
* The possibility of a Joint Venture for Winchester MgO project. Korab is currently in negotiations with a syndicate of financiers, builders, building materials suppliers and providers of pre-fabricated housing with regard to the development of the project as supplier of MgO-based products. For further details, refer to the last two quartely reports.
* The possibility of monetisation of Geolsec Project (eg 5% stake for A$500k to A$1 million). For further details, refer to the last quarterly.
There is no reason KOR cannot go higher than its recent share price highs.
As always, DYOR.
KOR Price at posting:
38.0¢ Sentiment: LT Buy Disclosure: Held
