The long game

I have just returned from a month or so detecting on Kin ground with a prospecting agreement. I didn't stumble on any company-making deposits or bump into personnel who blurted out company secrets, but I did have an opportunity to consider whether the medium to long term investment I made in Kin remains reasonable.

I have no earth shattering insights, but some comments:

1. There has been a lot of work going on more or less behind the scenes continuing to stitch together tenements. Certainly on the ground the long term goal of medium producer is evident. Some miscellaneous leases have been added for roads and pipelines, and those 0% mining leases on the last quarterly report are applications for mining leases still pending approval. Mining leases provide longer tenure than prospecting leases and are a step towards actual mining.

2. On the ground the connection between past productive areas, access roads, and Kin leases is evident. A lot of the areas Kin pegged, and surrounded with pegged ground, are covered in old shallow workings, scraped ground from the days of VLF detectors, dry blowings, and older pits and shafts.

3. The amount of old drill holes and more recent drilling is impressive. The old workings point to surface gold, or primary gold appearing at the surface which in the past would have to be explored by actual mining, both which point to the likelihood of supergene material formed by weathering of those old deposits and deeper primary ore from the deposits which produced the surface gold in the first place.

4. I was mindful that the board strongly endorsed TD's continued role in managing tenements and business development. Kin had some good ground and quite exciting prospects before it took on the LGP, and at least some of those remain as spin off possibilities. Some of Kin's leases sit right next to ground held by nickel producers. Mt Flora is right next to the Glencore's Murrin Murrin operation - you can hear the machinery and occasional explosions through the night.

5. They are still drilling. Definitely not fake news there.

My conclusion? The current SP is if nothing else a reminder that things can go wrong, so nothing is certain, but even 100 million shares issued would reduce my eventual profit by 30% or so, and the delay while they fill in the missing bits of the DFS will mean longer before dividends. But as a long term proposition it looks to me as if the plan to go into production and to expand the resource is still there. I thought the .40 options I had would make me some money one day. I still do, just 30% less maybe and a few months later.

When I am not playing at prospecting my expertise is in adverse events. My view is anyone who says they know that an adverse event is due to poor management or any other reason without access to a thorough investigation is making stuff up. Without actual evidence to contrary my view is the deal with Sprott meant the directors had to have the bottle to invoke a worst case scenario and suffer the hit to the SP, and the outrage on forums. I am hopeful the deal with Sprott can be saved, but I am not surprised they wanted to stop spending Sprott's money, and approach negotiations fully prepared to walk away, indeed, having already prepared the ground to walk away. That to me looks like competent management. Everything looks like good management when a company is gong well. Good management in a crisis is harder to spot, but I am actually reassured there has been no caving in to crowd-pleasing.

Just my 2 cents worth.