For once, I agree with you Boondog. I don't mind alternative views and when you take the trouble to articulate them better, I'll respond by taking you off ignore and replying to your post.
I believe that Kagara has done enough to turn things around. In fact, I think they have gone from one extreme (over spending) to the next (underspending) to prove a point.
As investors (and most analysts do) we are often to quick to punish companies for spending cash flow on assets or R&D to grow and develop the business. If companies don't they die. Judging companies solely by their ability to grow EBIDTA quarter by quarter is a poor long-term view because often businesses do that at expense of spending on quality assets & R&D.
In hindsight, a ramped up spend on development and exploration, at a time of acquisition (Einalseigh), low commodity prices, a high AUD and perhaps even higher diesel costs, was clearly too much to absorb and they should have scaled back on many things earlier.
However, past is past and here we are. What comforts me as an investor is that Kagara have a short-term and a longer-term plan and have clearly shifted towards growing cash flow and with major acquisitions, 1/3 of mine development and exploration costs out of the way. Going forward I expect to see a better cash position but a plan to continue mine development and move near term development resources into production i.e. King Volume
KZL Price at posting:
16.0¢ Sentiment: Buy Disclosure: Held
