RE:RE:I think the damage from the GDXJ / GDX issue is behind usyep...we are in deep value territory now with a pretty hard floor underneath us I would agree with that.
However, the question is how fast can KDX recover, bearing in mind that management seem to persist in pursing their own mine development plans, which do not necessarily align with shareholder growth interests.
I expect to have more investable funds available within a few weeks and will decide on the merits of adding to my KDX shareholding, which is 25% of KL, or alternatively increasing my KL interest, which could reduce my KDX / KL ratio to 15/20%. When reaching this decision, the question is more likely to be what share will increase by the greatest % in the next 6 months. My view is leaning towards KL for the following reasons:-
- KL is generating cash at the rate of CA$0.25m per quarter (based on Q1).
- KDX management has caused investor concern by, yet again, by forward selling part of its 2017 Q1 production out of apparent fear of the unknown. Although this could be argued by smoothing out sale of ore held, this technique has engendered so much disdain by gold investors that it should always be a last resort. If investors wished to speculate in the futures market, there are plenty of other market options open to them .
- KL has the enviable decision of using its cash surpluses for the payment of dividends to shareholders, or the storage of surplus as bullion, or alternatively conducting a massive drilling campaign at its properties. in contrast, the last numbers indicated that all of KDX's GEO revenue is being absorbed with preparing mines for long term future prospects, which managment may not see if it is at the cost of a low share price.
- Also in contrast to KL, all KDX’s Nevada costs are paid in US$, whereas all of KL’s mines are benefitting from lower local oprating costs and higher reserves.
- In the light of the above, there seems to be a higher probability that KL could increase its SP by 20% in the next 6 months that could KDX. The potentially game changing report that shareholders are awaiting from KDX is a Hollister mine plan. However, based on previous managment form, that could be disappointing in the short term due to the Hollister property being drilled out as if the property were little more that highly prospective “moose pasture”, but bought as a an enhanced producing mine.
- KL’s Makuch is a skilled mining engineer, but with a fairly dour personality, who delivers fo rshareholders. In the alternative, Huet may have got ahead of his ability to deliver when he made the comment below......................
https://www.youtube.com/watch?v=bUFsnw4iM_Q at 30 sec of the clip in the above link, Huet says …….
“ ……we have assembled a team hear that does not know how to fail….” In summary, if KDX mine resources were being marketed and turned into production quicker, then I would go with KDX. However, KL does not have to wait for its management to produce free cash and not only GEO’s.