KMN - Kings Minerals

[Sean K]

Wow 52c that's turning into a bargain, Mr Market is very confused! buyers are drying up. Time for some accumulation.

Panic selling. I'm still holding. Have a longer term view. Getting undervalued just on San Anton now. Check the MC to resource comparisons I posted earlier.

 

[doogie_goes_off]

Some smart cookie snapped up 150K @ 54c, there was a small flurry there for a moment, certainly a bargain at the intra day low of 52c IMO.

 

[Sean K]

Some smart cookie snapped up 150K @ 54c, there was a small flurry there for a moment, certainly a bargain at the intra day low of 52c IMO.

Well, I hope he was a smart cookie, doggie. But, the market has spoken in regard to the Kalman JORC. The rumour of 60Mt @ 1% Cu equiv was not met and she's been punished accordingly. I'm trying to turn my mind to 30% of San Anton and 11m oz au equiv (expanding) with Goldcorp to ease my mind...

 

[doogie_goes_off]

With regard to copper equivalents, I wouldn't be so worried if I was you, OK the tonnage was down but using the $6000/t for Cu, $30/lb for Mo (longer term prices) the copper equivalent grade would be pretty high:

1 pound = 0.00045359237 tonnes
therefore Moly price per tonne is 30/0.00045359237 = $66138 per tonne

as a ratio this makes the moly grades approx 11x the Copper equivalent

So: Copper equivalent = 0.35% Cu + 0.06x11 Copper equivalent input from moly OR 1.01% copper equivalent and that doesn't even include the input for gold and rhenium values.

So all we missed out on was a bit of tonnage which must be there because it's open in two directions and there's been recent drilling with good moly results.

I'd say the market just does not understand moly and this is why KMN, QOL and DGR are all undervalued IMO. Hold those KMN kennas, put them in the bottom drawer.

*Note this is not financial advice, you can sell them if you want to!

 

[Sean K]

With regard to copper equivalents, I wouldn't be so worried if I was you, OK the tonnage was down but using the $6000/t for Cu, $30/lb for Mo (longer term prices) the copper equivalent grade would be pretty high:

1 pound = 0.00045359237 tonnes
therefore Moly price per tonne is 30/0.00045359237 = $66138 per tonne

as a ratio this makes the moly grades approx 11x the Copper equivalent

So: Copper equivalent = 0.35% Cu + 0.06x11 Copper equivalent input from moly OR 1.01% copper equivalent and that doesn't even include the input for gold and rhenium values.

So all we missed out on was a bit of tonnage which must be there because it's open in two directions and there's been recent drilling with good moly results.

I'd say the market just does not understand moly and this is why KMN, QOL and DGR are all undervalued IMO. Hold those KMN kennas, put them in the bottom drawer.

*Note this is not financial advice, you can sell them if you want to!

LOL Fingers crossed the drilling to 500m + increases the tons and the Re adds a significant kick. Hopefully that new rig on site finds the deposit widen further at depth.

 

[Sean K]

Director buying $50K worth after the JORC is a bit encouraging.

I'm trying to put some things in perspective at the moment because I have quite a large chunk of this now and have not sold any, so I provide the following as some upside ideas:

Firstly, I think there are some imminent assays on the extention drilling at San Anton due. In the southern aspect they hit native copper, so perhaps if they get some really high grades and all the holes have mineral then SdG could be expanded from the current 11m oz au equiv....

Also at San Anton, exploration/scout drilling continues. It's a highly prospective area for a decent silver discovery I think.

At Kalman, drilling is continuing and with the new rig on site drilling to 500m ++ to 2000m, then there's potential for the deposit to be expanded significantly. It does widen at depth.

The Re assays have not been added to the JORC. As they correspond to the Mo we can assume that that is going to add a LOT of value to the IGV. That news would be nice about now!!

Now, downside:

San Anton drilling turns up dirt.
US recession turns into depression.
POG/POS/POC get smashed to obvilion.
Kalman has no depth extention.
Re grades turn out to be miniscule.
Kalman is too thin and deep a deposit to mine economically.
Exploration at Mt Isa finds dirt.
US attacks Iran who launches a nuke at Israel who launches a nuke at Iran and Russia backs the Arabs who go to war with the world.

Lets hope for the upside....

 

[Sean K]

Market's forgotten that this is half a gold company with a 35% ish share of a 10.19m oz au resource - expanding, and with numerous other systems at San Anton to host potential economic resources. While all the other goldies are swimming upstream, KMN just lays back and is getting washed away. Once again, it's now significantly undervalued, just on SdG as shown earlier...

 

[Sean K]

Kings recently released some more good Mo assays at Kalman which were duly ignored by the market. Since the unexpectedly low tonnage resource was released it's been smashed and has now followed the general market down for whatever reason while gold and gold stocks went north.

Technically, you may say that sitting just below 55 cents is concerning.


I wonder where the exploration drilling assays at San Anton announced in the June 07 Qtly and the Sep 07 Qtly is at?

 

[bvbfan]

I originally bought for the Moly exposure but surely the silver in Mexico is also got to be worth a punt.

Seems the Mexican projects are a little better (prospective should I say) grade/tonne wise from my little research

 

[Sean K]

I originally bought for the Moly exposure but surely the silver in Mexico is also got to be worth a punt.

Seems the Mexican projects are a little better (prospective should I say) grade/tonne wise from my little research

I orignially bought for San Anton in Mexico and Mt Isa was a bonus. I still think it's undervalued just on San Anton and the SdG project. It's low grade (around 1 g/t) but it's an open pit hill, they just have to scrape it away. Plus they're doing expansion drilling so the 10.19 m oz au equiv may climb. This will be through the copper credits. It looks like the silver gold internal is surrounded by a large copper halo that they are currently drilling. They hit native copper in one hole to the south, so it could be much larger. The strip ration at SdG is apparantly very good, so for feasability it looks like it will be a mine. Plus the PFS was on much lower commod prices. If they had a PR Manager (which they obviously do not) then they'd have an announcement out detailing this stuff, but it's up to us amateur investors to do the promotion for them.

 

[Sean K]

I'm losing patience.

Ann out yesterday as follows:

San Anton Expansion Drilling Update

Highlights

• King Minerals to increase its interest in the San Anton Project through its controlling interest in San Anton Resource Corporation.

• Scoping Study advances been made as metallurgical testwork continues to provide positive input parameters.

• Results received to date have encountered wide intersections of mineralization which will expand the already significant resource at Cerro del Gallo.

• Ongoing expansion drilling results received to date have included:


SA-285 309m @ 15g/t Ag, 0.10% Cu and 0.07g/t Au
incl 102m @ 16g/t Ag, 0.14% Cu and 0.14g/t Au

SA 286 403m @ 10g/t Ag, 0.11%Cu and 0.11g/t Au
incl 95m @ 13g/t Ag, 0.13% Cu and 0.11g/t Au

SA-289 278m @ 6g/t Ag, 0.16% Cu and 0.10g/t Au
incl 47m @ 15g/t Ag, 0.23% Cu and 0.03g/t Au

SA-303 131m @ 8g/t Ag, 0.18% Cu, 0.07g/t Au
incl 24m @ 15g/t Ag, 0.30% Cu and 0.06g/t Au

Good strikes.

However,

Someone better at interpreting grades might want to comment, or correct me, but I believe I have higher levels of Ag, Au, and Cu stuck under my running shoes!

How can they be 'highlights'.

 

[Sean K]

And I am freakin out about this H&S. Surely not possible?



Perhaps the rhenium is being swept under the carpet at the lab?

I revise that target to this one which is technically more acurate. Bankrupt.

And where is that Re in the resource estimate?

Under the carpet with the uranium I guess...

I still have no reply from my Dear Dudley letter.....

 

[exgeo]

I have also sent a mail to Kings, noting the fact that the only reference to the Rhenium in the "Kalman Copper-Molybdenum-Rhenium-Gold deposit" (this line copied from the recent quarterly report) is in the name! This is the only place the word Rhenium appears in the qtly. No reference to "assays still outstanding" or anything else that would reassure me. Not very impressed, and even less impressed when companies don't respond to shareholder enquiries. In my experience, most companies respond to shareholder enquiries pretty quickly.

 

[exgeo]

Reply from the company to my email of this morning:

Jim

Thanks for your email.

KMN’s share price has fallen at the same time and broadly in line with the ASX junior mining sector generally – so it appears unlikely KMN’s share price fall was related to the non-mention of rhenium in the resource statement – or anything fundamental about KMN itself. Seems more probable that KMN has simply suffered from the flight to defensive positions and profit taking – and given its strong run up late last year its a prime candidate for the latter..

As for rhenium – it wasn’t covered in the resource position announced 20 Dec 07 because it requires separate (and costly) assays - which the company elected not to perform for the resource statement. That’s not a comment on the level of rhenium in the ground – but more that any mining at Kalman is likely to be scoped on the basis of Molybdenum (Moly) and copper/gold resources – rhenium might then be assayed for, sometime down the track - in case it could add a premium to mine returns. The company previously flagged that Kalman has rhenium associated with its Moly – because that is known and may be part of the economic potential for the company. Shareholders should know this. But it is currently felt, for the purpose of establishing if Kalman could be a mineable resource bases, that it is more prudent and therefore appropriate to focus on Moly, Copper and Gold for now.

Feel welcome to call me on 61 7 3252 0122 if you have further questions...

Rgds

Greg Germon

Investor Relations Manager
Kings Minerals NL

 

[Sean K]

Reply from the company to my email of this morning:

Jim

Thanks for your email.

KMN’s share price has fallen at the same time and broadly in line with the ASX junior mining sector generally

........

As for rhenium – it wasn’t covered in the resource position announced 20 Dec 07 because it requires separate (and costly) assays - which the company elected not to perform for the resource statement. That’s not a comment on the level of rhenium in the ground – but more that any mining at Kalman is likely to be scoped on the basis of Molybdenum (Moly) and copper/gold resources – rhenium might then be assayed for, sometime down the track -

...............

Rgds

Greg Germon

Investor Relations Manager
Kings Minerals NL

exgeo thanks for this information.

Has the mid-tier resource sector really gone down 65%?
Anything else with 10m oz au + equiv JORC gone down 65%



In regards to the Re, the company must be joking that this hadn't become part of their plans for Kalman, or that uranium wasn't a significant part of the project.

I have some headings from announcements and presentations:

Apr 07 Presentation:
"Copper-Molybdenum-Gold-Uranium Deposit"
"Early intersections suggest a lot of value will be in Molybdenum and Uranium within a Cu-Au-Mo-U mineralising halo."

Aug 07 Presentation:
"Molybdenum / Copper / Gold / Uranium
Rhenium Metal Spectacular Grades"
"In April, we said there was “more to come” and since then the presence of high grade Rhenium has emerged at Kalman."

Jun 07 Qtly:
"Highlights
At Kalman:
Rhenium metal indicated to occur in high grades by world standards associated with Molybdenum at Kalman."
"During the quarter the Company became aware of and announced the association of the rare transition metal Rhenium with Molybdenum in the Mo, Cu, Au, U polymetallic Kalman Project."

Sep 07 Qtly:
"Highlights
At Kalman:
High grade molybdenum-rhenium within a broad copper gold mineralised zone."
"Encouraging results from Kalman confirm it is shaping up to become a major polymetallic deposit containing zones of high grade molybdenum-rhenium"

Dec 07 Qtly:
"During the quarter the Company announced an initial Mineral Resource Estimate for the Kalman Copper-Molybdenum-Rhenium-Gold deposit."

(what the? where's the rhenium, and when did uranium not become part of the plan? - last mentioned Aug 07, just a few months ago....)


They have been blabbing on abour Re and how valuable it was for months and leading us to believe this was part of the resource estimate (also saying it was going to be 700m, but nevermind) and now it's 'too expensive' to be assayed? I'm not just a little confused....


On another matter, I note with interest that in their 07 Annual Report released on 28 Sep stated that there were 18 drill holes into the Dolores target at San Anton with 'assays pending'. Must be lost in the mail. Or, perhaps they'll just appear in the next annual report like the Mt Philp haematite drill results. Full disclose, except if the results are bad....

I am also curious as to what's happened to the visable native copper strike to the south of CdG.

Aug 07 Pres:
"(Native) Copper occurs over 40metres in drillhole SA-291"

They came out with the assays in January which are listed below. Hole SA-291 has 'native copper' in it? WTF??

 

[Sean K]

Seems to have stopped frefalling and turned around.

Anyone go to a presentation and get a better feel for what's happening?

 

[Sean K]

Turned around just as easily and sitting precariously around long term support around 40, next stop possibly 30.

No need to remind people who read this thread of the fundamentals of San Anton. It's GOLD, I should mention. 10.19 m oz au equiv of it. Which has a current IGV of...... $10,190,000,000

So, that's a good reason for its sp to be closing in of 1/4 of it's highs.

Oh, then add in the next Olympic Dam at Kalman for some real amusement.

Did anyone read the Rhenium announcement. They've got loads of the stuff in the high grade Moly core of the deposit, but who would know. No media. No layman speak. No broker research. The Directors are too busy pissing their BSG winnings up against the wall to worry about promoting this company.

 

[morton_mains]

Kennas
Just spent an hour detailing Mr L.'s positive investor presentation and it lost it on preview... I will redo tomorrow.
Yeah its hard to figure KMN price as it does have so much going for it. The $1B IGV for Kalman and $13B for San Anton seems to be safe.

 

[morton_mains]

Investor presentation by Mr L. – was upbeat. They do main updates in cities twice a year. The handout was positive. I didn’t know KMN have a part time investor relations Mgr now so maybe more ann.s?
Anyway some notes I made as well as things I heard… I will respect it being hearsay and label it as “estimates”, obviously getting to hear it off record I’d like to respect that.

SAN ANTON
It big on silver! .. and he is understandly bullish on silver (CXC).
There are other very good prospects around Cerro del Gallo.
Opportunities around eventual ownership look likely to trigger more interest.. big players always on lookout for large mines, plus they are cashed up. And why wouldn’t they be looking at the $11B. Anyway in short term there’s ownership to consider…will SNN go for 100% (makes them more attractive as target) as they are in box seat to got to 100%.
Mr.L compared Cerro del Gallo favourably with Palmarejo.
The project has favourable setting – mining friendly, nearby infrastructure, low costs.
Low strip ratio estim. 0.57:1
Looking at capex $200-$400M, producing estim 400,000t of Au equiv.
Next 2 months Resources (small upgrade) & Metallurgy. Scoping study estim Aug08.


KALMAN
Supposedly $1B+
Very compact area. Maybe will be the Crown Jewel because of its high grades Moly, Rh I suspect some fondness because of the geology and compactness that makes it a sweet plum.
Cash at bank $11M looks set aside for Kalman – burn rate $1m month.

Rhenium – only 30tons p.a. demand – yes that’s pretty microscopic, but supply 20tons p.a. and its very valuable. I asked ballpark what it would be worth. Estim circa $500m. They have had XYZ (well known aircraft engine maker – Rh used to alloy engine parts to allow high temperatures that means fuel saving up to 30%) call to ask for details when production available. Grade is high.

Moly – grade also world class. Unusually visible in core samples.

Don’t hold breath for word on U. they are deliberately taking a quiet stance on this work. But really..can’t see how it could upstage the Mo,RH.

All in all pretty positive, but not "Ra Ra!".
MrL was certain that BOTH will be mines.
Banks already calling and with Board experience it would be a done deal to get it.

My small punt on a share that has Rh, which although down 50%, yikes!, looks good to accumulate for next 2-3 years target.

Only worry will be general markets, which may discourage explorers getting to production should credit get too tight or lower expectation of price mutliples. At this stage, yes KMN looks very undervalued.

He mentioned they had a lot of phone calls in Jan. from investors who were concerned around market correction - seems many were leveraged with margins - so may be another reason for support not coming back into price.

 

[Sean K]

Turned around just as easily and sitting precariously around long term support around 40, next stop possibly 30.

Golly, 30 could really be on the cards here. Seen a couple of big sells go through recently, one today pushing it down. Must be either people not believing, or needing cash, or expecting other opportunites. Or, maybe just a flight to safety with the speculative end of the markets caving in...

I'd have to revisit this around 30....