Kingsgate (KCN)

SilverSanchez

SilverSanchez

Active Member
Kingsgate just made a takeover bid for Laguna Resources (100% premium to opening share price today)

If successfull Kingsgate will have a prodicing Gold Mine in Thailand, A Silver project in Australia, and now another silver project in Chile

They are really trying to shure up mines and ounces... as a dividend paying stock these guys are really working hard to build a massive resource list - and most of the new aquisistion have been silver... me thinks this company is one to watch long term....

What do others think about this stock ATM?

135.27M issued

6.66 - 11.66 - 52 wk low/high

paying 5c dividend per share

Production has been down lately (i dont really like their project in Thailand, to be honest i hope they sell it). But these other mines look very substantial.
 
SilverSanchez said:
Im making a buy target of $6 - and i think ill get it - anyone wanna bet?
Click to expand...

Nope, reasonable chance it'll get there - my sense of the chart, that's all. I got a reply from a company rep to an email I sent querying the robustness of the Bowdens resource. The reply was slightly encouraging, but I'm still basically unconvinced. I'm a silver bug, so I'm hoping a $100 silver price in a year or so will rescue us, but there's no way I would be relying on that to buy a weak sounding resource like Bowdens.

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
 
Thatx for that Fin - I still like em though...

You have to do something with fiat and aquiring silver isnt a bad way to use it. If you are really expecting silver to hit $100, then the leverage on this sucker is great...

Hypothetical

A mine cash cost per ounce of Silver is $30
Spot price of Silver is $40 - average profit per ounce $10

Spot price goes up to $50 - cash costs stay steady
That is a 100% increase in profits

The leverage in the share price is an upside potentially - depends how you look at it.
It just depends on what you are looking for.
 
I picked these guys up for $5.91 (got in to early as usual as i watched it go down to about 5.60)
I am very pleased with my purchase as there was a nice return to a more fair valuation (although i still believe its undervalued compared to total resource value)

If you look at the chart there is a break as it burst through $7... so it may come back and fill - ill prob buy more mid $6 range....
 
Yeah I really like their managment. Thire aquisition of Bowdens and Luguna's silver projects means they fit my profile for a mid producer.

More than one mine
in more than one contry
good at deals
managment proven record w/ a similar take on the PM market as me

They have been around for a while, i like the CEO. Keeps saying at the AGM "this is what your company has done" "this is what your company spent" "this is how we have managed your company" - i like the shareholder respect.

I prefur to use lower values to do my maths because of future volitility - i think we just came through or coming through a bear trap in the Metals and PM Stocks. So i loaded up on mids producers and small cap developers. KCN's leverage potential is fantastic - really looking forward to seeing how these guys use their money to bring these projects online.
 
Couple more announcements released.

Directors have approved to proceed with a fully underwritten $70 million share placement. The proceeds of the
placement will be used primarily to supplement the funding of Kingsgate's development and exploration
expenditure plans for the Nueva Esperanza and Bowdens projects during 2012, including accelerating where
possible the development time for both of those projects.
Click to expand...
 
Just watched their financial review - nice results

The reason why im so bullish on this company is because it is essentially a brand new company, the amount of aquisitions they have made over the last 12 months means they no longer the Kingsgate of 14 months ago. They are a multi mine company with far larger potential than a single mine company. This has mid cap - large cap growth all over it, once they deal with their debt.
 
Yeah - $7.10 price of placement (probably wasnt that much of a discount when the sale went through - but KCN surged through $7... market needed a reason to backfill.

I bought at 7.17, will buy more under $7. Short term pain long term gain. I trust the managment. May turn out to be my downfall - I know its popular to loath managment of your companies when the SP is going down. But I dont.

Avg buy in price for me now is $6.55
 
Gapped down last two days - determined selling. Holders can hope for a test of 5.60 area of prior low, or even a low chance pull-up before that, but another way of looking at it is that the price has been in a downtrend channel and is looking for yet another lower low. I figure the $7 level should have held after the breakthrough, if the stock was healthy, because it was resistance become support, then the support failed and became resistance again. Now the whole 2 year thing above $7 is looking a bit like a horrible freaking top. Bowdens, I blame Bowdens and the capital raising, and increase in debt. Just the way I'm feeling about the chart, nothing sure about it.
 
Im mid and long term bullish on KCN because of their silver properties in peru and australia. They made shrewd aquisitions as well - they didnt over pay they got their properties cheap.
They are serious about their dividend policy as well.
I purchased some more today at 6.07
 
I'm waiting for a good sign of a bottom before I add - if I add. I still think Bowdens sucks - an acquisition shouldn't rely on a mega rally of the underlying metal for it to be robust.
 
Well if you wait for it to be robust in current prices, you cant get it cheap and you have competition - thats why i like the aquisition :) They did it early - just like my buying

Managment and I share a similar investing philosophy - but they are a lot smarter than me.
 
Looks like i pretty much bought the bottom today - we'll see if $6 support holds
Beware of a bounce - moving to retest $6 in the short term.

But im expecting this stock to be a long term hold
 
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