Ann: Operations Update, page-2

I can see some positives (relatively speaking) in this operational update.

First of all, the non-obvious fact that they are mining, but also the detail of the production figures.

Assuming that the additional 1.41k oz Au produced in Q1 2017 is entirely due to the open cut mining at Way Linggo during March alone (as the announcement seems to imply), then they should be able to produce 1.95k + 1.41k*3 = 6.18k oz Au in Q2, before any further operational improvements.

That would place them above the 5.7k oz Au production threshold identified as breakeven back in July 2016 (see slide 17 of the Jul 2016 Investor Presentation; a lot has happened meanwhile as far as their credibility goes, I know).

So, while KRM will have still burnt cash in Q1 2017 (3.36k oz Au imply an AISC in the vicinity of 2,000 US$/oz), at the current POG it no longer looks inconceivable that they will manage to break even in Q2 2017.

With that and the 6.4mA$ just raised, there should be enough “breathing space” to work out a solution for the water issue before funding becomes an issue again.

Not a lot to be cheerful about, but it’s better than nothing.

IMHO & DYOR