KMC -Kalgoorlie mining-GOLD --micro cap>jnr

[JBmurc]

KMC--have been meaning to put up a thread but have been loading up before letting others in ..LOL

shares-271.3mill
cash-6.5mill cash(june qtr)
current Mktcap-23mill

-Workforce and mining equipment secured with mining operations underway.(june qtr)
KMC have a 500koz gold plant now on site with commissoning early 2012 planned(from histronic production my est. numbers come to round 60,000oz production 4.6g/t average)

KMC-goals-----
-1moz resource by DEC 11
-500koz=60koz production 12/13 low cost/high grade

----------Going forward----------

-Confirmation of ore delivery & reciept of initial payment
-Secondary % payment indicating grade and costs
-Commencement of stoping East Lode
-Commencement of drilling Bullant Deeps
-Further Drill results from the South
-Approvals for staged development of processing facility
-Commence construction/refurbishment of primary crushing circuit
-Drill program to test new tenements
-Snowbird - drilling/selling/JV/spinoff?


--most recent ann---(toll treatment agreement underway from my est. number 500k+ per month EBIT into KMC bank)
18,000 tonnes of Bullant ore to the Kanowna Belle facilities per month for sale and processing.

Kalgoorlie Mining Company Ltd (KMC, formerly US Nickel Limited) is a resource development and exploration company based in Perth, Western Australia and with regional offices in Kalgoorlie, Western Australia. KMC has three projects including Bullant Gold Mine in Kalgoorlie, the Snowbird Project in Canada, and the Mid-Continent Project in USA.


web page (they need to update name)
http://www.usnickel.com.au/company/contact/

[JBmurc]

Now I have my fill I've been doing some more numbers that should come into play for KMC 12/13fy from the historic production grades from bullant I would
believe KMC 500k plant to produce at least 60koz p.a current AUD gold $1815oz ---I'd est. costs $1000per oz = $48,000,000 EBIT not bad for a 22.7mill company
If they get a 1moz resource like planned I believe they will maybe not by DEC11 but going from drilling grades/ history of bullant area..
which should mean they would have a 500,000oz reserve base or at their production rates 500koz=60koz p.a ---a 8.3 year life
A P.E of 3 will see KMC SP round=60c so thats my 12/13 selling target

[JBmurc]

Looking strong again today with the big correction in Gold overnight up KMC moves up-5% to 10.5c great to see it above 10c an now having to move in .05c movements an not .01c
brought weeks ago in the low 8's an more at average 9.4c on monday

[JBmurc]

http://www.proactiveinvestors.com.au/companies/news/18967/kalgoorlie-mining-company-to-deliver-gold-jorc-resource-at-east-lode-before-year-end-18967.html

Kalgoorlie Mining Company to deliver gold JORC Resource at East Lode before year end

Kalgoorlie Mining Company (ASX: KMC) continues to progress the Bullant Gold Mine in Western Australia, and has now positioned a team for development of the East Lode ore body.

Exploration will follow-up on the historic development undertaken by Barrick on the East Lode upper levels, and previous development undertaken by Kalgoorlie Mining.

Stage one development of the lode has commenced with ore being accessed from the existing Bullant Decline, which was intersected with less than 15 metres of waste access on each of the four current levels being developed.

The company said the existing decline extends to 700 metres below the surface and the current stage two and planned stage three drilling will extend to a depth of 500 metres.

This allows the potential for providing 10 more levels on this previously unexploited ore zone.

Chris Daws, managing director of Kalgoorlie Mining, told Proactive Investors today that a JORC Resource for the East Lode is expected before the end of the year, and is a high priority target for the company.

Daws added that when Barrick previously owner of the mine, they overlooked the lode due to the low gold price at the time.


Banking cash flows from Barrick ore agreement

Just last week Kalgoorlie Mining announced a cash flow generating agreement, with the company soon to bank funds generated from a gold ore agreement with the Australian subsidiary of Barrick Gold Corporation (NYSE: ABX).

Kalgoorlie Mining will receive around A$2 million by the end of the month, with the company being paid by Barrick when 18,000 tonnes of ore (175 truck movements) is trucked the 80 kilometres from Bullant to the Kanowna Belle gold processing facility.

The break down of the cash generation is Kalgoorlie Mining receives 70% of the estimated A$3 million to A$3.5 million value of the gold within the ore, with the final 30% determined on recovery rates and costs of the processing.

Now for the best bit, Kalgoorlie Mining will look to truck 20,000 tonnes of ore each month to Kanowna Belle for the next twelve months, providing the potential of over A$2 million a month - equating to A$24 million in cash.

This cash generation is actually more than the current A$21 million market capitalisation of Kalgoorlie Mining, indicating the enhanced revenue parameters are not (yet) factored into current valuation - a situation likely to change and presenting opportunities for investors.

After the twelve month period, Kalgoorlie Mining should be in the position to process the ore on-site, which will provide a boost in margins.

Adding some extra spice to the agreement, the company expects the gold ore grades to increase above 5 grams per tonne (g/t) in coming weeks, from around 3.5g/t - adding potential upside to the actual amount of gold produced.

[yabster]

Whats the ex price and date on those options JB?

Re some of your calcs above I read a media release on their site saying they are targeting 35,000oz a year - (intially 12-15). So where is the 60,ooo ozs come from- have I missed that or are you assuming that? thks

[JBmurc]

Whats the ex price and date on those options JB?

Re some of your calcs above I read a media release on their site saying they are targeting 35,000oz a year - (intially 12-15). So where is the 60,ooo ozs come from- have I missed that or are you assuming that? thks

ex price 25c May 2014

yeah here is the piece your talking about

Current plans forecast KMC
producing 12,000-15,000 ounces in the next 12 months, via the ore sale agreement with barrick.
production will then ramp up to plus-35,000oz per annum under KMC’s own treatment facility.

the current JORC resource of Bullant is 98koz so the reason why KMC may have stated to the media a 35k+ so they could say 3 years of production etc

I come up with a est. 60koz going from the historic grades produced from bullant times KMC plant's size 500,000ton p.a

- i.e - 4.6 grams per ton x 500,000 ton =2.3mill grams = 73,000 troy oz (but as grades/production could take awhile to run perfect I took a round lower est. 60k)

--Now had KMC stated best likely full year production 60-70k would show they only had one an half years production in place ...
I really think we'll see on the back of drilling results a much larger resource an in turn KMC lifting production month to month once they have their own production running

[JBmurc]

Kalgoorlie Mining Company becomes gold miner, earns first revenues in transformation to producer
Wednesday, August 31, 2011 by Proactive Investors

Kalgoorlie Mining Company (ASX: KMC) has transitioned into a cash generating gold miner with the first cash flows generated from trucking and sale of ore from the Bullant Gold Mine, via a gold ore agreement with Barrick Mines' (NYSE: ABX) Australian subsidiary.

Gross revenues of around A$2.1 million have been generated from the delivery of 10,507 dry tonnes of ore to Kanowna Belle, before haulage and processing costs. Under the terms of the ore purchase Agreement, a percentage of the provisional net proceeds will be paid to the company within 14 days.

The balance will be calculated and settled upon the treatment of the gold ore through the Kanowna Belle gold processing facility - following final determinations of grade and recoveries.

The 1,241 gold ounces recovered were at an average grade of 3.95 grams per tonne, at a provisional recovery of 93%. Grades are expected to increase with the commencement of open stope mining.

The delivery of the first gold ore and subsequent revenue generation is a pivotal moment for the company as it starts to build a significant gold business based around Bullant, which is located in the north eastern goldfields of Western Australia.


Chris Daws, managing director, told Proactive Investors today that a second phase of 12 tonnes of ore started the deliver process yesterday, and is forecast to be completed in around right days - at the same grade as the first delivery phase.

Adding some spice to the potential of the ore agreement, Daws said that the third run to start in late September is expected to have a grade of over 5g/t gold, providing a boost to the economics of the agreement.

The ore sales to the Australian subsidiary of Barrick are expected to continue monthly until Kalgoorlie Mining commissions its own gold treatment facility onsite in 2012.

Daws added that Kalgoorlie Mining is forecast to produce gold in the June quarter of 2012, at an annual rate of 40,000 ounces per year.


Analysis

With a current market valuation of just $25 million and likely to be earning over $1.5 million per month there is a "dis-connect" between current valuation and likely 12-18 month intrinsic value.

[Huang Chung]

Yeah JB, there are a few under the radar goldies under $30m mkt cap that are near production. A good place to go hunting :cool:.

[JBmurc]

Yeah JB, there are a few under the radar goldies under $30m mkt cap that are near production. A good place to go hunting :cool:.

yeah PXGOA KMCO my fav gold trades at this stage KMCO up 20% today could well see 30% if the bids meet the offers

[JBmurc]

ended up taking a very nice week profit of 35% on KMCO an round the same on my KMC on a longer few weeks holding...
certainly a great longer term hold BUY but as I'm a tax paying trader with a 100k capital loan payback planned later this month
I'm all for taking good profits off the table ...would like to get back into the KMCO on any decent pullback

[JBmurc]

well if the KMCO keep this up.. 100% return would not far away only another .005c another 29% move upwards today 3.5c...
--yet another to add to my list of sold on the way up .....if only I had got more cheap i would have more likely sold only 50% ....@ 2.7c