RE:RE:Daily Gold CommentsFresh money or moved sideways. Since the end of March this year, I started to accumulate KDX as my principal investment, but following the KLG/NMI merger proposal, I have already reallocated 25% to KLG.
It seems to me that a further reallocation to KLG could yield the best gains over a 6 month period, for the following reasons:-
- The current EV of KLG is lower at C$0.89bn, in contrast to KDX’s C$0.99bn.
- The annual rate of ounces produced by KLG in 2016 Q3 was 305k ounces – even though Maccassa had a week planned production close down in Q3 [NR 10/12/2016]. The 2017 ounces for KLG’s mines alone could reach 350k ounces?
- It will take some time for KDX to achieve maximum production from Hollister & True North, although the results could be impressive when this is achieved.
- KDX’s high grades will achieve higher profit per ounce produced. However, due to KLG’s volume of ounces currently being produced, it will benefit proportionately more from every $ increase in the POG, which can reasonably be expected into 2017.
- The above observations do not take into consideration the greatly increased KLG gold ounces which will be achieved when the NMI merger is approved.
- There also seems to be the prospect for ultra-high grades at the Eagle Fault in NMI’s Fosterville mine. If these can be converted to production ounces, then the production gap between KLG and KDX will widen even further.