Damage Has Mostly Been Done Barring Any More Bad News
The stock is trading for a little more than 1X sales if KLDX were to produce 200,000 oz in 2018. If AISC winds up being 1,000 and I believe at minimum that the average selling price of gold this year would be $1,350 in 2018. At $350 an ounce in cash flow before exploration expenses we would be at $70,000,000 for 2018. Trading at 5X cash it would give a mkt cap of $350 million which is $50 million above where this stock is trading now. In a healthy market with better valuations for miners you could see PE of 20 or P/EBITDA of 8X or higher. If KLDX actually can be effective at cutting costs and get to $950 AISC or lower then things can get alot better. I do believe we should see a Gold price within 2 months higher than $1,400. I also believe that the gold price will stay above this level for the remainder of the year one it resistance becomes support. Gold has been moving on dollar declines. I am still waiting on the fear trade to kick in on Gold. Ultimately I believe the fear trade will get us higher and then additional dollar declines will be the rocket fuel to send gold even higher. KLDX Just needs to deliver on what they say without anymore downside surprises. 4 analyst downgrades in 2 days is not becoming of mgmt. The good news is that all of our strong buys have been moved to hold (analyst talk for sell). So it cant get much worse given no additional bad news. Time will tell.