Hello Andy & all,I know that it has been a bit of an ordeal for...

Hello Andy & all,

I know that it has been a bit of an ordeal for long term holders to have
endured the SP drop from $1.20 to 40 c since the unfortunate accident
2 years ago come next September. So rather than brood over the past,
lets look ahead say 12 months.

There have been very encouraging reports on bonanza grades but rather
than get carried away with these reports lets do a rough calculation
on on what is conservatively possible.

Lets assume that the earnings after tax is $800 AUD/oz.

The Talang Santo hoist has a capacity of 500 Ton/Day
The plant upgraded ($2 mil spend) has also got a capacity of 500 Ton/Day
The 3 UD trucks have have a haul capacity of 500 Ton/Day
( 12 round trips/day X say 15 ton x 3 = 540 ton/day)

all this can give us 500 ton/day throughput.

Lets say that the average grade is 12 grms/ton with 70 grms silver
equivalent to approx 13 grms/ton AU.

So 500 x 365 x 13 x $800 x .85 divided by 31
= $52 million approx NPAT or 14.5c EPS or $1.45 SP @ a P/E of 10, IMO.

If KRM can tap the rich veins in the next 12 months then we could see the
average grade lift as high as 20/g/ton which would be an exciting prospect

Once the permits are issued over the next 5 weeks we should see an immediate lift in SP towards 50c,again IMO.

I guess that it is comforting to know that directors and families own 60 million
shares so it is in their interest too to see the SP get back to where it was before the accident.

Good luck all

Moorookamick

ps; The company production forecasts by the company are probably conservative IMO, due to the new CEO not wanting to raise expectations too high and then being unable to deliver. MM.