The stock is consolidating nicely. The sellers have had a chance...

The stock is consolidating nicely. The sellers have had a chance to lighten up/get out and there have been no shortage of buyers.
After the rights issue dust settles, KGL will have 1,061M shares. Assuming a 16c share price, that is a market cap of $170M which would include a cash component of circa $70M.
That implies an EV for the total assets of $100M. When one considers Andash will be generating free cash flow of circa $100M per year at current gold/copper prices, KGL is in fact trading on an EV/FCF of 1. I have excluded the $50M debt with Macquarie at this point in time as KGL will be in a position to pay that off completely after circa 6 months production. Mind boggling really. All from a straight forward open cut mine.

In anyone's language, an EV/FCF ratio of 1 is incredibly cheap. An EV/FCF ratio of 3 is more in line with listed peers globally. This in my opinion justifies a KGL price of circa 50c just on Andash alone. Add in the exploration upside (which in my opinion is huge) and one can see a share price well in excess of 50c by the time Andash is fully commissioned in 1st quarter 2012.