RE:KLDX weak today Agreed that forward sales is what has unsettled investors.
- Forward sales are normally associated with high cost producers, who cannot sustain a reduction in the POG in order to survive.
- However, KLDX is positioned at the opposite end of the spectrum - it produces gold at the highest grade of any mine globally and therefore forward sales were unexpected by the market.
For the above reasons, management seems to have been convinced that this negative step will be a price worth paying,
if it secures the committments for increased capital expenditure in H2,
without the need to resport to share dilution. I agree with PMInvestor08 that a production announcement for Rice Lake is more likely to be mid to late Q3, rather than later in H2, as conservatively budgeted on completion of the purchase.
When the mine plan output and higrade sourcing in Rice Lake is announced, this could be the booster for the SP, soon to be followed by the increased production which the Fire Creek capex is expected to produce from Q4.