RE:I think both SSO and GFI are taking noteIn addition to the unique KDX price anchor, investors need to consider the historical annecdotes:-
- sell in May and go away.
- summer doldrums
As was alluded to previously, huet seems to be fixated with only reporting reserves from aquisitions based on their own post aquisition drilling.
Whilst the KDX model may be focused on narrow vein reserves and resources which they identify, there should be no reason not to carry resources properly identified by previous mine ownerd, such as San Gold. Whilst the pre ownership resources may not be as cost effective to mine, if the POG rises, then it may be worth mining lower grade bulk resources.
At least KDX should report the existence of resources that prior owners reported, in order to justify the purchase price and support the SP.
In the alternative, a scenario could develop where it may be suggested that some could be percieved to benefit from an unwarranted share price fall, which is not aggressively rebutted, in the event of a take over.
It does not seem credible that sophisticated institutional investors would be confused by a new accounting treatment, which in any event is already applied in all US centric goldmines.
Whilst the production build up should come through in 2018 onwards, it seems that the historic potential at Hollister and TN are being underplayed by an ultra cautious managment, who engender this concenr by investors by forward selling Q1 production at $1250. So what if the POg in Q2 when sales could reach the market may be $1200. The poisonous history of forward selling miners is not easy to erase. If KDX were mining at a cash cost of, say, $1100 at Fire Creek, then the risk / reward may be worthwhile. However, when cash costs are far less then 50% of the POG, it is a sign of weakness to forward sell.