RE:RE:Im outYour purchase may seem to have been well founded when viewed in Q4.
- In the last press release it was announced that $10m additional capital expenditure to budget will be made in Nevada in 2016.
- also, in the recent interview with VP Jean Seberg, it was confirmed that KDX would provide C$10m for capex at rice Lake (not budgeted as capex for 2016 since the deal was only compelted in Jan 2016).
Both these decisions suggest that KDX could be on course for a massive increase in production from Q4 onwards. When it is considered that rice Lake was once a $1.4bn mine, bought for $32m, the future return on this project, costing less than $50m, could be producing 50k ounces in 2017, could uplift the share rating. Similarly, past capex at fire Creek has proved to be accretive to shareholders.
It seems therefore, that the board has taken the short term price hedging decision in order to ensure a predictable cash flow during the 2016 "summer doldrums", so that 2016 will be the platform for an assured earnings leap in 2017.