RE:RE:RE:RE:RE:RE:RE:KLDX and the miners ought to fly next week!
It seems that your calculations illustrate that in 2018, KDX will prove to have been a farsighted purchase, for the company at a $585m market value.
It seems perverse that a “mining” company such as Osisko, which is many years away of building and operating a mine on its Windfall property, is now valued at ~ C$1b by the market.
Furthermore, at an EV of $585m KDX could be bought out by KL’s cash in hand and operating cash inflow in 2017 (say 550k ounces at $800 above cash cost = $440k + $250k cash in hand after deb rep = above KDX MV.)
The question that I would raise is how attractive the narrow vein mining operations would be to conventional UG and pit miners? Particularly so, if the Huet “family” of managers were not retained.
Perhaps Huet is exploring the prospect of a pit at Firecreek in order to enhance the reserves and attractiveness of the longevity of the company’s assets.
My caveat about the relative increase of KDX compared to a 2017 high volume, high grade producer such as KL, is that relatively the SP gap may not start to close until Q3 / Q4 in 2017. My personal 25% KDX to 75% KL weighting will be maintained, as KDX is clearly a potential takeover target at its current value.
My instinct is that KDX would be attractive to KL, as Kl’s model seems to revolve around adding high grade mines. It would also add a third Tier 1 geopolitical territory to Canada & Australia.
The Belkin report interview, currently on King World News, highlights their policy of the rotation of investments, when the market overreacts to events. Therefore, my increase of weighting from KDX to KL may take place in Q3.