Value Discussion

Have been doing some further digging on KRM, open for discussions.

Key points:
1) MC of ~50 million
2) 8-9 g/t average grade, higher grades >30 g/t indicated at Level 5 of Santo mine (not accessed yet).
3) One operating mine in Indonesia, with a plant. Plant is 140ktpa processing (equates to about 35-40kpoz gold per annum at the above grade).
4) 2016 produced only 19,000 ounces gold (1583 oz/mon), 40 000 oz silver. Indicated in their investor presentation they need 1900 oz/mon to break even at US $1400/ounce.
5) ASIC for the last quarter was $2164 AU/oz due to issues with water and reduced production impacts.
6) Reserves of 360 koz Au, 1 million Ag. Estimated mine life of 9 years @ 40koza.
7) Have had serious water issues with access to higher grade areas. Have had a capital raise of $8.5 million to address water issues, pumping and look at reducing entire mines ASIC costs.

Overall, it is understandable why there SP is low given they have been hemorrhaging money. However they are going about the right steps to fix this, which wont be an immediate response. The trends upwards I imagine would be when they start producing above the 1900 oz/mon and drop the ASIC down and sort the water issues. Given how many Aus gold miner juniors have ASICS around $1100-1200/oz, no debt, record profits and higher productions (100-300kpoza) you can see why the money has headed their way.

I for one still think KRM are a good prospect if they can turn these issues around, but for now will continue to watch and put my money in companies that are producing at low costs.

My opinion, looking forward to a good discussion.