future budget, page-5

Hey, Auch

I think their costs are between 1200 and 1300. So, if they are thinking the gold may be in the 1300 - 1400 selling range, it kind of ends up as 'what is the point'.

I sent John McKinstry a nice email saying I was happy KGM is such a 'nimble' company. They said 'well, we will redsign pits, we will scrape up just some really economic stuff, we will look into some high grade underground, etc'

I think they are well, well managed. They do not have big ongoing plant and people to support.

My feeling is they will simply 'survive' until the end of the year. They will make a 'little' profit, but maybe it will be NIL actually with costs.

If you think POG will recover, KGM is an amazing bargain. I read some analysts thing POG will end up nearer a $1000 soon. In that case, KGM is worth nothing.

But, they have the ability to hibernate if they need. But the bear must wake up... or die, I guess.

KGM is a punt on POG.

Personally, I think POG will recover. And KGM will be back to my PE 6 or 7 company. Either that, or they will be worth ZILCH.

If you think POG will be 1700 (like me) by end of year, they are great. If you think POG will be 1200 by end of year... bye bye. It is your call.

Mind you, one could BUY gold at 1400 and you have much less leverage... you will make 30% or lose 30%. KGM will be 'you lose all or your double/treble'.

You gotta call the POG for yourself. At least KGM wont con you on other stuff. They are very much POG leveraged... not funny management leveraged. If you know what I mean.