Having spoken to Bell Potter (valuation Dec 2011 @$2.00) and the...

Having spoken to Bell Potter (valuation Dec 2011 @$2.00) and the
KRM CEO on an ongoing basis, I'd prefer to accept Bell Potter's valuation.

Just because KRM missed Mar Qtr target doesn't mean that it will continue to miss targets.

In fact, on the contrary, the company has confirmed that the plant's
throughput capacity will lift to 300-400 tons/day in June with better
recovery rates. Let's assume that the grade from June onwards is 15/g/t au
31,850 tons/qtr (we'll disregards the silver)
Let us assume an average of 350 tons/day (300-400 tons/day)

That is 31,850 x 15 divided by 31.10347 = 15,360 ozs Au/Qtr
= 61,440 ozs Au/PA.

Suppose we take your figures of $1000 profit/oz,
Thats $61.44 mil profit P/A or 22.18 cents EPS
Your valuation would give a P/E of 5-6 ( mine is 10) which, even assuming that
drilling did not improve the resource is rather pessimistic. Given the current drill program, I believe that we can expect significant ongoing resource
upgrades.

At this stage my assumption is that the resource will lift from the
current 400K+ to 600K+ over the next year and that throughput will
reach plant capacity of 600 tons/day within 18 months giving rise to a third mine.

So in summary, my investment decision is based on the Bell Potter valuation
of $2.00 by the end of 2012 and significantly more by Dec 2013.

I note that you open your post by saying that "I do not know the company
very well yet you conclude that " "personally, my opinion is KRM is fully valued for now" but I beg to differ for the above reasons

With kind regards
Moorookamick