What's up with KRM?, page-3

Classic case of the baby being thrown out with the bathwater, IMO.

The fundamentals going forward are still the same:
-POG in AUD is $1396 (higher than it was in July)
-KRM closer to full production than what it was in July (due to hit full production in 2 weeks)
-derisked better than July
-all-in sustainable cost (AiSC) the same as July
-profit margin the same as July
-mining closer to rich Splay vein than it was in July.

The SP has dropped from 55c to the current 37.5c , IMO,
due to general market bearish sentiment and instos
generally selling down their gold stocks because of perceived
margin squeeze.

Locals such as NCM has an all-in sustainable cost (AISC)
of about $1080 US ($1277 AUD) are marginally profitable
while a low cost producer like KRM with an AISC of $700 US
($795 AUD) are still very profitable but this is a case where
MR Market is not differentiating between the two.

KRM is a relatively illiquid stock (nominal turnover of about 250K/day)
and an extra 200k sales in a day can also have a significant impact
on SP. The converse is also true when there is buying pressure.

The two key dates are:
(a) confirmation of full production throughput in mid Oct
(b) Sept quarterlies at end of OCT.

Even at the conservative 40K AU forecast for FY 14-15, KRM's NPAT should be
$24 mil or an EPS of 6.7c.
If KRM produces say another 12 K ozs AU due to the Splay vein then the extra
10K ozs ($14 mil AUD) should go to the bottom line which would be an extra 3.8 c EPS.
(total EPS of 10.5 c). With a conservative P/E of 10, this, IMO, should take the SP
to over $1
Cheers
Moorookamick

PS: all of this of course is IMO only and investors should do their own research and consult
a licensed financial planner before investing. MM.