I am afraid that is not quite correct. I have found this management to be quite careful with how they invest in exploration and production. They have come a long way with the money they have raised. I am surprised they havent so far come back for another share raising.
The major problem is the labour, capital works, equipment and construction costs are terrible in Australia. Only those with very rich ore grades and/or huge scale are able to do well. KBL doesnt have that scale yet but I think they will squeak through the rough period.
The latest presentation is very very light on the actual economics of current production, so we can take it as a given that the margins are thin. If they can get the economics to pay the SP will soar.
The total value of their metal ore reserves leaving out Iron (Au, Ag, Zn, Pb, Cu) is $4.7 billion. In terms of gold equivalent it would be 2.6 Moz. The company valuation would place this in a range of 40c - $1.17 with a mean value of 78c a share. That is where this share belongs if they can show decent margins in production.
KBL Price at posting:
15.5¢ Sentiment: Buy Disclosure: Held
