KCN Kingsgate

[nelehdine]

Used to have over 4000 Tracker but fortunately bailed at 375 ( when gold was under $400oz ). Still have a few scraps ( 479 ) but agree at 275 it might be interesting. To be honest the one's I have owe me absolutely nothing and I think Newcrest has such a great outlook I have put all my "gold" money into them.

[Bobco]

Not doing too good today, anybody got an idea of why this particular goldy is out of favour at the moment?

[JBmurc]

Have had a CFD long in KCN of late got huge upside once they get the Northern leases which could be very soon most brokers value $6-$8 on a 600 gold price my pick is $1000oz+ in 08
-Trading of late has be strange in the way alot of very small orders keep selling into any bids then just after close a big boy buys up over 10% of the days total volume.
-of late- LGL,NCM,DOM,EQIetc have all been brought up while KCN has been going sideways and down,Any other ST hold KCN am looking at buy some shares soon





-----------------off huntleys---------------------BUY--------

KCNs Chatree gold mine in Thailand hosts 1.7Moz of reserves and 3.8Moz of resources. Mine life is over 12 years at current throughput rates with potential to convert/delineate more ounces a key attraction. A plan to double production to 300kozpa appeals. Negatives include foreign currency exposure and country risk. Political uncertainty has increased since the Thai coup. Recent environmental approvals reduce uncertainty regarding the ungranted northern licenses. Their granting is nonetheless imperative. Gold production is unhedged. KCN is appropriate for risk tolerant investors seeking gold exposure and exploration blue sky.

Event04-Oct-2007
Ongoing growth in Chinese metals consumption followed by India, mining industry input cost inflation, industry consolidation, infrastructure bottlenecks, a scarcity of quality resources due to years of exploration neglect and sovereign risk are all underpinning commodity price strength. The long run average marginal cost of production has jumped permanently higher for most commodities. Much of the new demand has been satisfied by higher cost mines. Australia is a major beneficiary of the macro economic fundamentals and not surprising our currency continues to rise, at last count 86.8 US cents versus our long term forecast of 0.76. We have previously been in no great hurry to increase that long term number as our commodity price forecasts are cast with an eye more firmly on the A$ prices, rather than US dollar prices. The ratio of the A$/US$ exchange rate versus US dollar commodity prices is more important. We now upgrade our long term A$/US$ exchange rate outlook to 0.80.

Business Impact: KCN has recovered from recent $4.50ps lows but is still sufficiently below our valuation to retain a Buy. The 20% increase in our long term gold price forecast sees that valuation increase by an impressive 37% to $8.24ps. KCN had a forgettable FY07 punctuated by delays with the grant of the Chatree North mining leases. The head of the Thai mines department says the leases will be granted soon. That will see increased feed grade of around 2g/t, maintenance of high mill throughput and recoveries, and a major cost decrease. Those positives will be enhanced by selling into favourable spot prices now hedging is extinguished. The company forecasts FY08 production of 110-120koz prior to a rise to 140-150koz once northern leases contribute. A doubling of capacity, dependent on Chatree North, remains on track for December 2008 commissioning. The risk is in the timing and likelihood of Chatree North lease grants. Low grade stock piles sufficient for a year's production and a $70m injection from the sale of Andean Resources provide some breathing space for delays.





Event Analysis
COMPANY PRICE OLD VALUATION NEW VALUATION FY08 EPS FY09 EPS RECO
KCN 5.16 6.00 8.25 28 83.8 Buy

[JBmurc]

Kingsgate focuses on securing Thai licence
Kevin Andrusiak | October 05, 2007

GOLD miner Kingsgate Consolidated says it will use the $70 million proceeds booked from the sale of its stake in Andean Resources to further its interest in Thailand.

Chief executive Gavin Thomas said the sale was done solely to cash in on the Andean share price, which had been tracking record highs since late September. Kingsgate built an 18.35 per cent stake in Andean during a bitter, scrip-only takeover battle last year.

The sale was done through Canadian brokers with 63.55 million shares sold to unknown parties at $1.10 each.

Andean controls the Cerro Negro gold project in Argentina. This is yet to get into production and has a market capitalisation about $150 million less than Kinsgate's.

"My personal view is that we would have driven the project a lot harder," Mr Thomas said.

"We will use the money to repay debt. I'd very much like to be debt free."

Mr Thomas said he was still confident that Thai authorities would grant much needed access to develop the northern leases at its flagship Chatree gold project before the Thai general election on December 23.

He would seek an update on the approvals process after flying to Thailand yesterday.

"In Thailand they don't want to be pushed," he said.

"We will get there. We are the second largest Australian investor in Thailand."

The mining licence approvals are essential if Kingsgate is to replace the falling ore grades at Chatree and become a 300,000 ounce a year producer with reserves of 10 million ounces.

The company began the approvals process in 2004 in what is traditionally a very convoluted process.

Kingsgate posted a loss of $12.6 million in the 2006-07 fiscal year on revenues of $52.6 million. Market forecasts are for Kingsgate to produce 110,000 ounces this financial year, but that estimate depends on access to the northern leases.

Findlay Securities broker Gerard Farley said he expected Kingsgate shares to soar if the mining leases were granted.

Industry analysts say that if the leases were granted, this would spark a rash of takeover activity for the company.

Mr Thomas declined to say whether the company had already been approached. Informed sources, however, said there had already been at least three suitors who had come knocking on Kingsgate's front door and that a takeover bid was "probable".

[JBmurc]

Huntley’s still have a strong recommendation on this stock

They make an interesting comment about the increase in Thai mining royalties...

"The bureaucratic problems that seem to be plaguing the entities responsible for the granting of the Chatree North mining leases are conspicuously absent from the body charged with increasing mining royalties. The Thais have shown extreme efficiency in lifting royalties across a range of commodities...."

They also say.."FY08 earnings forecast declines 25% to 21.4cps.FY09 forecast is relatively unchanged at 84.2cps. That sharp FY09 increase reflects inclusion of Chatree North's higher grades, the partial year of plant expansion and unhedged production. Long term assumptions remain a US$650/oz gold price, an A$/US$ exchange rate of 0.80 and a 15% discount rate. Despite the valuation decline, KCN remains well and truly within our Buy range"

I still believe that the current price volatility offers a superb buying opportunity and investors patience will be well and truly rewarded in the short term.

[Joshuatree]

Anyone holding? i see debt blown out.

[Joshuatree]

Up 44.5% today to $1.18 after re 5 years of shutdown by thai govt. 2.5 years ago re 20-23c.