Hi Stevienix,
Tip for the future, never respond in haste, as you may have read it totally wrong and could reply incorrectly.
Yes we are talking about a mining company, that in recent times has gone backwards, due to a number of reasons. However, they have some assets, and it is not imminent, that as they actually have production output, they won't be able to pay their debts. Price of gold fluctuates and could surprise us all. That would have some significant impact on your cash flow dire predictions.
I guess you don't invest in small cap mining stocks often. I suggest you have a look at other such stock's cash flow, it is usually zero, as they are only still establishing if there is anything to mine, and if it is economical!!! So their is a lot of money going out, and not yet coming in, and a few years to wait for a return. Huge debt, and no return immediately, and you think KBL is something odd??
KBL is in the category of small cap mining stocks, the fact they have any positive cash flow from any output, that is marketable, and not just pie in the sky, is a real bonus. They process gold, and many pundits predict the POG will go higher, so it seems to me, it is a positive that KBL actually delivers an end product, that is gold bars.
Any mining company producer is well aware of what supply of ore it needs to produce, and KBL is no different, so looking for other resources. This is back to finding more resources, just like any new player, and it costs the shareholders to start with.
If KBL is worth it, which I think they probably are, they will find the necessary resources. Many others have, and with significantly less assets, such as the ability to process the ore, like KBL who can give a shorter time for a return to shareholders, as opposed to those that have no assets yet built.
The shareholders in those small cap miners don't do a revolt because there is no immediate cash flow, and usually wear a significant amount of debt in the start up phase, which can accumulate over time to even higher levels that what KBL is facing now.
Give KBL some slack, as they are better positioned than most to actually output a product, than those who are just hoping they find something, which oddly enough have a higher share price.
I guess the term that sometime you have to spend money to make real money is beyond your terms of reference. I guess it is what small cap mining is all about. Sometimes it works brilliantly and other times it doesn't.
For what it is worth, despite all your banging on about debt, mining is very real debt before you reap profits, so doesn't fit the text book version of a business, and never will, reason for huge rewards for the risk.
I suggest you move on to other stocks that fit your paranoia about debt and cash flow, as it doesn't work in mining stocks at any level immediately, or even at regular intervals.
I guess, back to that glass half full or half empty view, and how you understand risk. I think this stock has more going for it than the current share price reflects.
Cheers
gsmaree
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