... look out below ..., page-4

re: ... look out below ...downside to double check, i had a look at the article again - and there it is, in the third column

it appears that an analyst for jb sachs goldman were - ie mr preston, made the following comment

"whilst we have made no change to our short term 'outperform' and long term 'buy' recommendation, we remain cautious that kingsgate may MATERIALLY OVERPAY for andean resources" mr preston said.

there may be several ways to look at the statement, but watso can only conclude that mr preston thinks that kcn are MATERIALLY OVERPAYING for andean

andean have also included a share price graph of kcn, which shows how the share price can increase, when a company goes into production. the graph starts of with the kcn price at about $2 (discovery), which then fell down to about 50 c. watso can assure you, that if the graph had an earlier time frame, then it would have been seen that kcn was above $3 for the discovery phase. watso wishes to point out, that there are a lot of uncertainties, and time between discovery, feasibility and commissioning. what attracted watso to kcn, was that maquarie bank offerred 100% funding for the mine - ie no dilution of share capital. from memory, the funding was for us$35m, which at the time would have been worth about au$70m. at the time, there were about 70m shares on issue (the company subsequently had a 1 for 6 issue). It could have been that one of the attractions for mac bank, was that the first mined ore, was from a high grade (5 gramms) cap, sitting nicely in a hill - it all pointed to easy mining, high grade, and early return

any mine development for andean, is years and dollars away. without double checking everything, but it would not surprise me, that the costs of developing a mine, have doubled in the past 5 years - certainly in terms of $us it has, and even maybe in terms of au dollars. just for a ballpark figure, there probably would not be much change out of au$100m, wait a few years, and this could escalate.

andean still has a lot of work (ie $$$$) to bring the project to the funding stage, and in general terms, there will have to be a good level of equity funding - ie more $$$$$$$, ie more share issues. do not be surprised if there is a doubling of the share issue, within the next few years