Kingsgate (KCN)

Discussion in 'Stocks & Derivatives' started by SilverSanchez, Nov 1, 2011.

  1. SilverSanchez

    SilverSanchez Active Member

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    Survived the investigation - innocent

    Used the time to bring forward maintenance from later this year, no negative impact on guidance

    big drop in share price and recovered.... good sign

    Silver asset write down - expected
     
  2. bellinvest

    bellinvest New Member

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    Share price has since ascended to close at $0.760 today, coming off a low point in early March of around $0.630 (aftershock of Thai dispute).

    The company continues to see some great drill results from their deposit in Chile with some more notable results outside the existing resource base as follows;

    **12m @ 3.24g/t gold & 118g/t silver (5.2g/t AuEq60)
    from 232 metres in ECHR-84;
    **21m @ 6.62g/t gold & 260g/t silver (11.0g/t AuEq60)
    from 149 metres in ECHR-89; and,
    **20m @ 4.12g/t gold & 115g/t silver (6.0g/t AuEq6)
    from 177 metres in ECHR-90.

    As per their quarterly report the main work streams were primarily focused on drilling of the Chimberos West gold zone and
    completing the geological interpretation in support of a maiden resource estimate for Chimberos West.

    At the end of March, a total of 16,890 metres have been drilled at Chimberos and Chimberos West and drilling has also
    commenced at other prospective gold zones including Potosi and Boulder, leveraging off the geological interpretation
    from Chimberos West.

    I had to go back a few years to read the feasibility studies completed on the deposit/s (i would recommend any astute investor/speculator to do the same). Essentially 3 initial pits will feed a plant which will produce ~7,500,000 oz/Ag for a minimum of 6 years under current planning. Cash cost ~USD$11.50oz/AgEq and initial Capital Expenditure ~$140,000,000. There may be some issues with electricity/water supply but i believe ongoing work is being carried out to mitigate these project risks.

    With the Thai dispute resolved and full production back under way, we should start seeing some improving fundamentals for KCN.

    Everyone has gone quite on Gold/Silver equities which can be a good sign to pick up some stocks trading well below their Net Asset Value (These guys have a net asset value ~$550M and a Market Cap of ~$170M). Their eps averaged over the last 10 years is also very attractive... with the last 1-2 years being the worst years (not unlike 90% of ASX goldies). With a bit of luck and with increasing gold/silver prices, KCN should do well over the coming years.

    DYOR.
     
  3. long john silver

    long john silver Member

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    Wow,

    Just reread this thread from the beginning, it does a lot to showcase the risks involved when investing in precious metal mining shares.

    I am one of the lucky ones having bought in at $1.80 and again earlier this year @ .67 for an average of around $1.00 (closed @.70 on Friday)

    Still see potential especially in their assets in Chile but currently lamenting missed opportunity elsewhere.
     
  4. bellinvest

    bellinvest New Member

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    Yep!

    I'm averaging $0.92...

    They seem to have been the dead dog in the gold sector in recent times! I think the short sellers are heavily involved in the low price.

    If they can keep drilling their Chile assets and turn that into a cash flow operating they will turn the corner. I think their Silver/Zinc project in NSW is junk and their Challenger Mine is too high cost (nearing it's end of life anyway). They have a fairly healthy cash pile but just don't seem to be doing anything overly adventurous to get the bigger money interested. Time will tell if they can turn the corner...



     
  5. long john silver

    long john silver Member

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    Agreed,

    But hoping that they can extend the life of challenger. With all the infrastructure in place the lower grade ore bodies should be economical to mine at a gold price of over $1600 and could provide some good cash flow to help develop the Chilean project.

    With regards Bowdens, its going to be marginal at best unless we get a serious increase in the price of silver,

    I think finicky was asking the right questions in post number three:




    Hello,

    I am wondering if the case for the Bowdens project can be further explained in your presentations to potential investors.
    I don't understand how such a low grade silver resource is attractive to mine. Less than 2 ozs/tonne of Ag.
    From the notes I can't judge whether that is before or after adjustment for 81% metallurgical recovery. I ignore the paltry presence of lead and zinc in the ore.
    I really don't get it, I've been buying into spec miners for a few years, mostly unsuccessfully, and this Bowdens resource seems close to the most pathetic thing I've seen in a prospect. And the costs will be Australian not Thai.


    I have only 2,000 shares in Kingsgate but was recently looking at it for a family buy when the price dropped. The Bowdens purchase is what put me off.

    Rgds

    finicky




    Dear finicky,

    Thank you for your enquiry.

    For your information, please note that a 2oz/t Ag (~60g/t Ag) orebody is, for reference, equivalent to a ~1.3g/t Au orebody using the AuEq45 ratio we use.
    For an ore body that outcrops and has a 1:1 strip ratio I think you might find that the economics look very attractive at current silver prices and quite robust on any reasonable forecasts. Please note that the Pb and Zn by-products would lift the grade closer to 78g/t Ag, equivalent to ~ 1.7g/t Au using the AuEq45.
    If you would like to discuss further please feel free to contact me.
    Kind regards,

    Joel Forwood

    General Manager Corporate & Markets
     
  6. finicky

    finicky Well-Known Member Silver Stacker

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    Thankyou long john, you have rocketed into my top 10 faves, silver sanchez in the rear somewhat.
    Holders should watch for a sign of volatility imo, none lately on a weekly or monthly basis, daily positive. Dont know how to post charts from a tablet.
    Not a good business imo, and Gavin Thomas has passed on - what's he saying ss?
     
  7. long john silver

    long john silver Member

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    More drama and questionable management decisions from Kingsgate during the week: http://www.asx.com.au/asxpdf/20151104/pdf/432qkgr4ybsnvj.pdf

    I reckon there is still lots of gold to be extracted from challenger with the right management and also scope to use the mill to toll treat deposits from the surrounding area. Talk about giving away a mine and processing plant for a fraction of replacement cost.

    Will be interested in investing in the company that ends up getting it.
     
  8. long john silver

    long john silver Member

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    http://www.reuters.com/article/us-thailand-australia-mine-idUSKCN0Y11KU

    Thailand has ordered the closure of its only active gold mine by the end of the year, the industry ministry said on Tuesday, in the wake of concerns it was responsible for contamination suffered by villagers.

    In January 2015 a military government investigation team said that more than 300 people tested positive for arsenic and manganese at Akara Resources' Chatree mine, located 280 km (174 miles) north of the capital Bangkok.

    Akara, a subsidiary of Australian company Kingsgate Consolidated Ltd, produced and exported 4 tonnes (4,000 kgs) of gold in 2015.


    Looks like the final nail in the coffin!!!!!!

    Maybe i got lucky when i finally decided to bite the bullet and get out for a 70+% loss a few weeks ago.

    Some terrible management over the years in a company that once had lots of potential.

    Seems to be lots of interest in stocks on Silver Stackers lately, i reckon any novice investors could do worse than read this thread in full for a bit of education on the risks of investing in mining stocks.

    Good luck to any holders, lets hope for a positive outcome.

    John
     
  9. billybob888

    billybob888 Well-Known Member Silver Stacker

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    My single greatest investment mistake was to purchase this stock when it had dividends.
     
  10. Guest

    Guest Guest

    Me too
     
  11. Caput Lupinum

    Caput Lupinum Active Member Silver Stacker

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    Did they forget to pay the "tea money" again?
     
  12. bellinvest

    bellinvest New Member

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    I sold out too awhile back because of the volatility in dealing with Thai Authories.

    I thought it was a half decent business... then they sold their pathetic project in NSW for a $60m loss to SVL which is a dump of a company.

    Reinvested elsewhere and havent looked back!

    Came out smarter and wiser.

    Cheers,
    BB
     
  13. Stackman

    Stackman Member Silver Stacker

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    ASX announcement:
    This is going to be interesting to watch on Monday.
     
  14. SilverSanchez

    SilverSanchez Active Member

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    I have $6k left in kcn. I've already written it off. I don't have high hopes.
     
  15. SilverSanchez

    SilverSanchez Active Member

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    wow,
    Bought @0.15

    It was worth it for their cash. Shaking like a leaf.

    Have absolutely no idea where price will end up today
     
  16. SilverSanchez

    SilverSanchez Active Member

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    I think an 86% gain today for my risk
     
  17. SilverDJ

    SilverDJ Well-Known Member

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    Wow, what a dog this one's been:
    [​IMG]
     
  18. hihosilver

    hihosilver New Member

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    I bought this dog at $2.83 what a joke. I have absolutely no luck on any mining shares...... at the time I also purchased Lynas & Chesser too.
     
  19. SilverSanchez

    SilverSanchez Active Member

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    You poor poor man..... literally ;)
     
  20. SilverSanchez

    SilverSanchez Active Member

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    Ill see how trading goes tomorrow, i'm leaning towards holding. Many things that were a mystery are largely known now. but we'll see
     

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