KMN - Kings Minerals

[jooooooles]

Placement was at 55 cents. Wouldn't panic the spread is high and tightly held. Don't let that fool you with small parcles going through. There is solid support at 70 cents

 

[Sean K]

sheet! Whats happening to KMN. Its 0.7 now after they release more shares today.

TIme to sell and run???
Whats the price of the new shares they released???

Placement was at 55 cents. Time to sell and run? I think if you think the market is going to crash completely then you should be in cash if you have a short term horizon. If not, and certain companies related to particularly valuable commods are in a zone of rapid growth, such as developing a gold mine with 11m oz au equiv, and a Cu/Mo/Re/Au/U mine with potentially 200Mt + at 1% + Cu equiv, then it may be a longer term opportunity. Depends on your individual situation.

 

[jooooooles]

What would I know? Absolutely nothing - support at 70 just got smashed..................................

 

[Sean K]

What would I know? Absolutely nothing - support at 70 just got smashed..................................

Hasn't gone below 70 yet but I agree there should be some there. I'm always hesitant to call S&R intra day because that is where most of the emotion is played out and is not reflective of more considered positions. Still, in perspective, it's run from the bottom at 55 very hard and this could have been anticipated. I certainly believed 80 ish was hard work as posted. I think a lot of the short term sentiment now will lie not only in market direction but any perceived positives and negatives from Kalman. The market will tell us this week. Risk/reward play in the short term, but longer term I still see this as a valuable company. Just not sure how to put a figure on it without a JORC and more guidance on Kalman.

 

[Sean K]

This is prospective (sorry, a bit long):

Ann out....

18 December 2007

Exploration Discovers New Copper-Gold±Molybdenum, Mount Isa Project
Highlights

• Copper-gold mineralisation traced for ~1km at Trafalgar
• High grade copper±gold values reported from Scalper
• New copper-gold zone discovered at Serendipity
• Copper-gold-molybdenum mineralisation found south of Kalman

The Directors are pleased to announce the first round of highly encouraging geochemical assay results (Figure 1) from a reconnaissance exploration program in the Mount Isa tenements which commenced in October 2007.

The regional exploration program consisted of ground checking a number of selected conceptual targets considered prospective for copper-gold±molybdenum mineralisation and historic prospects using surface rock
chip geochemistry as a first pass screening tool for prioritizing exploration targets for further work. This regional exploration program has identified a number of areas prospective for copper-gold±molybdenum mineralisation throughout the Mount Isa project area.

Secondary copper mineralisation in the Trafalgar area has been traced over a strike length of 970m. The length of this structure is similar to that at Kalman. The old Trafalgar mine is covered by a small mining lease held by a third party and is excluded from the Kings tenement. The zone of secondary copper mineralisation at the old Trafalgar mine extends south of the mining lease boundary for at least 520m and north of the mining lease boundary for at least 50m. Rock chip samples from shallow prospecting pits and trenches along the secondary copper zone extending south of the mining lease boundary assay up to 11.6% Cu and 1.00g/t Au, while on the north side of the mining lease boundary assay values up to 4.9% Cu and 0.46g/t Au are reported from dump material of an old shaft. Sampling of sulphide-rich material from the dump of an old shaft along the southern extension of the Trafalgar copper zone returned assay values of 4.5% Cu and 0.67g/t Au.

At Leesa, near Trafalgar, assay values of up to 3.8% Cu and 1.11g/t Au are reported. Highly anomalous copper-gold mineralisation has also been confirmed at several other historic prospects, including Scalper and Big Pearl. Anomalous copper has also been reported from an ironstone 10km north of Kalman (un-named 2 prospect of Figure 1).

At Scalper a gossanous zone has been traced over a strike length of 70m with rock chip assays up to 8.5% Cu and 1.95 g/t Au. The gossanous zone is up to 5m wide. Sampling at Big Pearl has yielded values of up to 7.1% Cu and 1.45 g/t Au from dump material adjacent to old shallow pits prospecting poorly outcropping secondary copper mineralisation. -2- 18 December 2007 Reconnaissance exploration south of Kalman has identified a new zone of copper-gold mineralisation named Serendipity and another un-named copper-gold-molybdenum prospect.

At the newly discovered Serendipity prospect located 5.4km south of Kalman rock chip sampling returned values up to 3.4% Cu and 2.98g/t Au. Sampling at an un-named prospect having a number of geological similarities to Kalman and located 2.7km south of Kalman yielded rock chip assay values of 7.4% Cu, 3.38g/t Au and 600ppm Mo. The alteration mineralisation system is exposed in a small area on a low hill.

The Trafalgar, Leesa, Big Pearl and Scalper prospects occur within tenure owned 100% by Kings Minerals, while Serendipity, un-named copper-gold molybdenum prospect, Pelican and Pelican West, are located in an area subject to a joint venture in which Kings is entitled to earn a 70% interest.

The reconnaissance exploration program is continuing and further results will be reported upon the receipt of assay results.

The Company still expects to release the first resource estimate for Kalman by the end of this week.

Yours sincerely,
KINGS MINERALS NL
Dudley R Leitch
Managing Director

The tenaments at Mt Isa are looking to hold quite a few deposits by the look. The prospects to the south along the Pilgrim Fault are what really grab me. These could easily be folded into any PFS/BFS around Kalman if they have a similar type of mineralisation profile.

Hopefully we have a positive ASX day for the announcement.

 

[shaunm]

I could see this happening. It has gone from 62.5 cents to 73 cents in the space of 5-10 minutes. I was so close to throwing $10k in but have just been spooked by the last 2 days.

 

[Sean K]

Crikey, up 6% on that ann after the pre open. Didn't expect that. It's now created a big gap in the spread so I'm not sure if this short term bullish can be maintained in this twitchy environment. Still, obviously a good thing, for the minute

 

[imaginator]

:

Crikey, up 6% on that ann after the pre open. Didn't expect that. It's now created a big gap in the spread so I'm not sure if this short term bullish can be maintained in this twitchy environment. Still, obviously a good thing, for the minute

all I can say is........... ARRRRRRRRRRRRRGGGGGGHHHHHHHHHHHH should have bought it at 625 this morning!

now its 73

BUt luckily I didnt sell this morning at 625, if not it would been a double whammy!

 

[Sean K]

: BUt luckily I didnt sell this morning at 625, if not it would been a double whammy!

imaginator, I have done exactly this before , we all do it I reckon. So, you still probably have some dues to owe! :

I want to look into this ann a little more because it may have some very significant implications for the economics of Kalman. If Kalman runs into the deposits identified to the south, then this could be an incredible strike at significant depth, which is still open.

 

[doogie_goes_off]

Plenty more detail required in the coming months about exploration, but it now has what I look for - resources and exploration upside, jumped in at 63.

 

[Sean K]

Plenty more detail required in the coming months about exploration, but it now has what I look for - resources and exploration upside, jumped in at 63.

Yeah, it's a nice combination. Still a long way to mining anything yet. If San Anton gets the thumbs up it'll take a year ish to put in the infrastructure to start digging, although being a hill and open pit with roads everywhere shouldn't be that long perhaps.



Another ann out after the close with an update on drilling at Kalman:

18 December 2007

The Manager

Company Announcements Office
Australian Stock Exchange
Via Online Electronic Lodgement

Kalman Drilling Update

Highlights

• Continuity of the molybdenum mineralisation confirmed by initial 50m infill drilling

• Significant high grade molybdenum mineralisation intersected includes:

43m @ 0.27% MoS2 from 200m in K-56
53m @ 0.61% MoS2 from 255m in K-58
16m @ 0.31% MoS2 from 191m in K-59
24m @ 0.24% MoS2 from 239m in K-61

I'm still getting my head around Mo grades and implications for the economics of a project but I know anything over .2% is very good.

Might be worth comparing the potential for Kalman to the richest Mo mine in the world. This is from an early Kings presentation:

The Henderson Mine (Phelps Dodge) near Denver Colorado is arguably the richest Mo mine known:

• reserves around 160 Mt @ 0.35% MoS2 (No other significant economic metals)
• mineralisation starts ~1,000m below surface
• ore zones generally 5 – 30 metres wide

Kalman early down hole drill results:

• 73m @ 0.62% MoS2 Eq
• 329m @ 0.31% MoS2 Eq
• mineralisation starts within 20 metres of surface

As an Australian comparison, MOL is probably a good benchmark.

MOL has Proven and Probable Reserves of 314.6Mt @ 0.061% Mo, 0.092%Cu, and 1.7 g/t Ag.

I'm pretty sure that is MoS2, so compare the grades to Kalman.

 

[jooooooles]

Kennas 0.06% Mo = 0.10% MoS2

edit: So, this indicates that the grades at Kalman are very good.

 

[doogie_goes_off]

What a great resource - just goes to prove that the market is a fool.

1 tonne = 2204.6 pounds
27800 tonnes of moly x 2204.6 = 61.3 million pounds of molybdenum
1 pound of molybdenum = $US 30
$US value of molybdenum in the ground 30*61.3million = 1.84 billion dollars US worth of molybdenum in the groundDo I have this right?
172,200 tonnes of copper x $US 6000/tonne = 1.032 billion dollars US worth of copper in the ground
250,600 oz of gold x $US 700/oz = 0.175 billion dollars US worth of gold in the ground
Total in ground value > 3 billion dollars US, divide that by ~400 million shares equals about $7.5 US a share

I'd say KMN are undervalued by around $2 a share, but that's only my opinion DYOR

Watch out for the takeover of KMN

*Note - just realised that they only own 70% of one part of the resource so these figures will be approximately 15% too high.

 

[doogie_goes_off]

Rhenium grades could add significant value to the deposit,

Average grade of rhenium should conservatively be around 0.4ppm according to their graph

0.4ppm = 0.4 grams per tonne

49.7 million tonnes x 0.4 grams per tonne = 19.88 million grams

1 gram = 0.032 ounces

So 19.88*0.032 = 0.636 million ounces

Rhenium price = $900 US an ounce

therefore 900/oz*0.636 million oz = 572 million dollars US (another half billion of value perhaps?)

What else does the market want? A miracle.

 

[prawn_86]

Doogie,

Companies are usually calued at approx (very rough guide) 5 - 10% of their in ground value.

So with an IGV of $8 per share you would expect 80c as a conservative estimate.

Obviously there are many many numerous exceptions. Point is that you wont find an explorer valued at the full price of their in-ground resources

 

[doogie_goes_off]

Clearly this is true, however the estimate would not include all the current drilling to date and we just had some great hits, this is a world class moly resource and it wont take long before someone notices it and wants a piece of the action.

 

[Sean K]

I'm very disappointed with the JORC.

My numbers to get to the tonnage were obviously way off. The only differences should have been the width and depth they used for the JORC which were slightly lower than my assumptions at 600m depth and 100m width, but even using their numbers I get a different total tonnage.

1000 x 500 x 90 x 2.5 = 112.5Mt

Obviously this is not how you work out a tonnage for this particular deposit.


I agree with Prawn that MC should be around 5-10% IGV but there are plenty of examples where this is not the case. Boys on HC have a total IGV for Kalman and San Anton of US$7b which gives us somewhere between US$350-$700, which is well above the current $250m ish...

Here is joooooles numbers (thanks)

KMN - MARKET CAP @ 67.5 CENTS = $266 MILLION

Current in ground value @ Kalman

CU US 3$ POUND
MO US 33$ POUND
AU US 800$ OUNCE

VALUE @ KALMAN IN GROUND = US$3.36 BILLION

MEXICO

10 Million Ounces AU EQ (SNN OWNING 66%, KMN OWWNING 73% of SNN)

= US $3.8 BILLION

TOTAL IN GROUND VALUE OF KINGS MINERALS RESOURCES > US$ 7 BILLION

Doggie, I think you're close with what you say here, but as I said above there's numerous companies not conforming to the IGV theory, for whatever reason. Perhaps it's just time?

What a great resource - just goes to prove that the market is a fool.

1 tonne = 2204.6 pounds
27800 tonnes of moly x 2204.6 = 61.3 million pounds of molybdenum
1 pound of molybdenum = $US 30
$US value of molybdenum in the ground 30*61.3million = 1.84 billion dollars US worth of molybdenum in the groundDo I have this right?
172,200 tonnes of copper x $US 6000/tonne = 1.032 billion dollars US worth of copper in the ground
250,600 oz of gold x $US 700/oz = 0.175 billion dollars US worth of gold in the ground
Total in ground value > 3 billion dollars US, divide that by ~400 million shares equals about $7.5 US a share

I'd say KMN are undervalued by around $2 a share, but that's only my opinion DYOR

Watch out for the takeover of KMN

*Note - just realised that they only own 70% of one part of the resource so these figures will be approximately 15% too high.

 

[doogie_goes_off]

Resource estimation that meets JORC is not a simple width x length x depth but it will get you in the ball park i would have thought that 80Mt would have been possible at an inferred category. It looks like they have run two "grade domains", one for copper and one for the higher grade moly, i'd guess that the lower than expected tonnage is due to the copper zone not contributing as much as I expected. If grade is king then Kings Minerals are living up to their name. Note there is an inferred/indicated resource out for DGR's project today too. Better grades, moly only, smaller tonnage, worth a look.

 

[imaginator]

Whats going on with KMN today??

I thought .675 was cheap, and it closed at .595?

What the-----------------------------

Hey I see a double top forming, anyone scramming?

 

[doogie_goes_off]

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