The drop in SP is hurting. But this is a low Market Cap company...

The drop in SP is hurting. But this is a low Market Cap company with a low number of shares.

The PFS for Norseman Gold Prospects has started. This should be conducted in a short timeframe because much of the work was done in 2001 by JR Engineering (JRE). They found that the gold mining wasn't viable at $550 per oz. Downer EDI took over JRE and have been contracted to do the new PFS. They hold all the old data. J Macintyre and Associates have been contracted to oversee and evaluate the old JRE PFS and as far as I understand it, the the new PFS being done by Downer EDI. J Macintyre and Associates specialise in gold and nickel. NICKEL, CLINKER HILL!

I don't know what the Norseman Gold PFS will tell us. I imagine that it will be something similar to the recent Norseman Scoping Study. That is, as long as the gold price stays high, the low grade gold will be commercial.

KAL has 1.44 Million ozs of gold at grades from 1.6 to 3.4 g/tonne. Boyang 1 posted that maybe only about 300,000 ozs of gold could be mined as a commercial venture. He may well be right.

GOLD.
Abbotshall; inferred 30K ozs at 2.0 g/t.
North Scotia; inferred 40K ozs at 3.4 g/t.
Mt. Henry; indicated 350K ozs and 280 K ozs inferred ,at 1.9 g/t.
Selene; indicated 600K ozs and 140 K ozs inferred ,at 1.9 g/t.
Dunnesville; drilling.
Jackpot; Advanced exploration (whatever that means).

NICKEL.
The March Quarterly stated that Clinker Hill Nickel was to be drilled in the last quarter of this year. For some reason, this timetable was brought forward. Drilling started in this quarter. The good thing about the Clinker Hill Nickel is that it is in the Sulphide compound and not the Laterite. Sulphide is cheaper to process. Maybe Nickel is the new focus. I don't know.

But what I do know is that KAL spent $127K on exploration in the last quarter and they are spending $483K this quarter. They are stepping up the exploration/research activity. Add $80K of admin costs for the quarter and this will leave KAL with about $1.3 or 1.4 million in cash left at the end of this quarter.

The full FS on Norsman gold is due at the end of the year, so KAL may need to do some fundraising for this. I am guessing that KAL will be trying their hardest to release some tasty news before any share placement.

KAL has;
126 million listed shares.
48.5 million unlisted shares.
51.4 million listed options, which will never be exercised at 20 cents in July 2008. IMO.
10.5 million unlisted options, which will never be exercised at between 20 and 30 cents in July 2008. IMO.
10 million unlisted options, which expire in 2010 and 2011.

At a share price of 5.5 cents, this produces a diluted market cap (assuming the July 2008 options will not be exercised) of $10.1 million. This is very low.

This $10 million company has plenty of upside. Six months ago, KAL had a market cap of $40 million plus and the resources have increased since then.

This is my 5.5 cents worth.