Reasons to Listen to the Earnings Report Conference Call First of all, let me congratuate myself for being wrong on my eps prediction of 0.05/share.
The actual was $0.07/share. The prior TTM eps was 0.02, 0.02, 0.01, 0.05 or $0.10/sh....
so 0.07 now replaces 0.05 and TTM eps now becomes $0.12/sh... next month's 1st q eps will replace 0.01.
As Peter Lynch used to say, a growth stock should be about earnings growth as exemplified
by 2020 full year TTM eps as 0.05, 0.04, 0.08, 0.02 or $0.19/sh.
The following takeaways were from the conference call or the follow up interview:
1.) The PM of PNG called a meeting w Lewins to recognize KNT efforts and proceeded to ask Lewins what the government could do to help. Lewins replied, "help w new license applications". The PM then instructed his economics minister to see that it happened.
I'm always concerned about countries not having a good relationship w mining cos but not here.
2.) KNT dropping quarantine constraints next month which had been costing about $60 of AISC.
However, do not expect another $672 AISC figure 1st quarter. It will likely move to lower end of guidance ($890-970) due to 2 major ?? (missed his wording) plus a lot of sustaining capital going into PH2a and Ph3.
3.) PH2a--> he indicated completion in 4th q or by 4th q (ie 400k to 500k t/annum.
Some PH3 spending actually in process now (twin incline, vent shaft, camp expansion/workshop)
4.) Supply chain issues recently affected shipping (3 batches shipped rather than regular batch ship due to intermittent shipping). Good news is that they get credit for 85% of shipment when it reaches port of Lae.
5.) Significant amount of gold not shipped (not recorded as gold sold) in 4th q due to above. This would seemingly be a major positive for 1st q results if shipping returns to normal.
6.) Gravity circuit goal 10-30% of gold shipment into dore rather than shipped concentrate. If I heard correctly, this will result in a net 4% improvement in gold payment (I thought it would be more).
7.) Lewins market perception of PNG- if mine was in western Australia then 50% higher stock price. Lewins, of coarsw, has a more positive perception based on his relationship w government.
8.) Judd--> only 20% of lease drilled (most but not all here knew that so I mention)
9.) Takeover target- Lewins not specific here but mentioned that the market doesn't understand
KNT long term potential to the same degree as those in the mining industry
10.) He mentioned again, Stage 2a to 500k t/annum; stage 3 to 1.2M t/annum then stage 4, 5, 6 potentially to 5M t/annum or potentially 300-350 gold eq per year.. might be getting ahead of ourselves here but this may be what the mining industry sees relative to takeover.
11.) Cash at end 3rd q= $56M but $71.3M reported for end 4th q. However, in early March interview, cash was at $80M and now at $88.5M. During PM meeting, he told PM that KNT would invest
1 billion Kina ($290 USD)over next 3 years. I believe a lot of the $290M has already been spent so a followup question next quarter might be how much cash is needed now to complete Ph2 & 3 expansion.
Next catalyst: 1st q production update in 15 days or so