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Message: Some here might remember the astute Buckshot from the old ARU fourm days...
Well here he is from a post yesterday re: Kennady Diamonds > KDI;
August 25, 2013 06:06 pm
I think you guys are barking up some wrong trees. Keep in mind that KDI's mkt cap is just under $100m and even at $10 per share would still be only $200m. The mkt has mpv's 49% of GK valued at around $550m. So even in the most absurd world of leveraged buyouts KDI isn't buying a thing.
Furthermore MPV spun out KDI because it felt the value of the 13 claims and leases (now the Kennady North Project) was not being recognized by the mkt, something that now appears to be very correct. So MPV isn't going to turn around and consolidate this package as it has more value as a stand alone pure play. Even if they lost their minds and decided it was a good idea, the "Interested Parties" (mgmt and dir's) that have roles in both companies would make such a deal impossible due to the conflicts in interest.
So, if there is ever to be a consolidation here it would have to be De Beers buying KDI or MPV or both. Regardless of what you may want or dream, that is the only way the math and logistics could possibly work.
The really good dreams start when you start running up the numbers on what de beers might pay for KDI.
Furthermore MPV spun out KDI because it felt the value of the 13 claims and leases (now the Kennady North Project) was not being recognized by the mkt, something that now appears to be very correct. So MPV isn't going to turn around and consolidate this package as it has more value as a stand alone pure play. Even if they lost their minds and decided it was a good idea, the "Interested Parties" (mgmt and dir's) that have roles in both companies would make such a deal impossible due to the conflicts in interest.
So, if there is ever to be a consolidation here it would have to be De Beers buying KDI or MPV or both. Regardless of what you may want or dream, that is the only way the math and logistics could possibly work.
The really good dreams start when you start running up the numbers on what de beers might pay for KDI.
Mining always comes down to how much a tonne of rock is worth and how much it would cost to get it out of the ground. In the current MPV presentation it is estimated that mining costs will be $60 a tonne so that part of the equation is pretty straightforward.
Stay conservative and use $200 x million tonnes = $billion. That would make todays million shares out worth just over $100 ea. The fun thing is, the above numbers might be conservative.
It's going to come down to grade and tonnes. I think they are going to have the tonnes, although without any drill coordinates or maps it is pretty much impossible to comment on.
The grade we will find out about in November I suspect. Until then we might as well dream BIG :)
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