I think 2012 will be a difficult one for KCN, production wise...

I think 2012 will be a difficult one for KCN, production wise .
How this effects the share price, I don't know.

Medium term , KCN has good prospects I think, but short term ( ie. for the next 12 months) it will be all about cash constraints and managing debt.

As I see it , the 2 silver projects are a long way from production ( 2-3 years I'd guess , minimum) so no revenue from them , and considerable exploration drilling costs and expense required.

Challenger is a turn around story, and these are usually not so easy. It will take some time to increase production significantly and cut cost of production.

Chatree is still awaiting its factory license, and whilst this has been got around to a large extent, it is still costing significant downtime . The high grade ore has not yet been accessed, and overall grade appears to be less than planned. Or so I hear.

Thus, whilst production has improved considerably over running just the old plant, it will not be the quantum leap everyone expected. All relative, I know.

Also, the company has taken on a significant debt burden now, to fund the Chatree expansion and to purchase the 2 silver properties- to some extent this may have been to alleviate the one mine, one country sovereign risk profile for the banks, but it may? also be a case of running too hard, too fast?

in summary, short term prospects not so good, medium term much better, assuming silver and gold price hold up over the next couple of years.I expect the next quarterly to be a little improved, and no doubt the company will put on a brave face, but still not impressive.

Takeover target perhaps ?

My 2 cents worth.