Ed: Spoke with their top banana in mid-March, and that was the anticipated time-frame - a decision should be at sometime between now and next Friday. The mine has been driving to reopen their mines since last year - when their then-backer pulled out in mid-March, causing the shares, which had been trading between $1.30 -> $2.00'ish, to drop down to 0.50 -> .60. There was a lot of unfinished details which were looked after in the ensuing period, during which time Keno got the natives in their area on-side, along with the provincial govt. authorities, a merger with their neighbor, NDU Resources, some help from Barramundi Gold (BAM) in the form of $4 MM (approx.), the approval of their Water Licence, and finally, the much sought-after Minister's Imprimateur!! Now, all this in place, their merger with NDU completed, their silver-zinc-lead high-grade ore bodies combined, and the price of silver recovering first to $5, where their feasibility study pegged the price of silver, and looked good; they then re-hashed their potential earnings at the higher $6 price of silver, which looked even BETTER, and now, well ... where's Silver going anyway?
Their ore reserves keep growing as the prices of silver, zinc and lead grow - and I was told they were holding discussions first with a couple of European banks for their required $24 MM in development capital, then they had to talk to two investment houses - all these finances to be backed with silver bonds - followed by more discussions with three additional investment firms, which were looking at issuing more shares, Keno's last preference. All this was supposed to be completed by today, and a decision made sometime by next Friday. Anyway, that was the PLAN! Meanwhile, development work lumbers along - with a survey completed of the 20 km. or roadway to the neighboring NDU property, from which ore is planned to be trucked for processing at Keno's old mill, which is to be replaced with a modern, more efficient mill later when cash flow allows it. In the meantime, cash is tight, and their creditors make noises from time to time, freely broadcast by the local radio, wanting their money - of course, knowing they, too, have to be patient, but this helps Keno point to the urgency of requiring the money to resume production, so it's a kind of slow, quasi-political waltz - scaring off the newbie investor to flee to more established but less-exciting silver plays like ASM, SSO or even PAA, the grand-daddy!! However, THIS one's at its bottom right now, with almost NO remaining downside, (it loitered between 0.46 and 0.55 when the mine was sitting there on stand-by, with old-timer volunteers watching over the dewatering sump-pumps!! :) - and an upside that goes all the way to ... ... ... ... (fill in blanks!)
So what does one do? Well, we wait! I figure if they go with the last alternative, ie. more shares, the stock will no doubt take more time to rise in price, as shareholders ponder the tradeoff between production profits and share-dilution, before deciding profits will take place ANYWAY, otherwise the backers wouldn't offer the deal!! If silver bonds are used as the vehicle, the shares SHOULD jump more substantially on announcement of the news - well, probably on rumor of this kind of announcement. Why? If silver prices keep rising, less and less silver will be required to back the bond if it's at a fixed price rather than a fixed quantity of silver - I don't know how silver bonds work, exactly. How high can the shares bounce on the first leg? Charts indicate a resistance around $1.65 -> $1.70, then another one somewhere around $2.10 -> $2.20. Back in '82, Keno traded as high as $68!
Conclusion: Wait. Have patience! This is a mine that HAS BEEN IN PRODUCTION before, has high-grade ore, whose price is on the upswing, and all the important political paperwork and deal-making is behind them (unlike INCO's!! :) And the ore isn't going anywhere while we wait. Resumption of mining will be using mechanized, large-scale production methods, which will make it even more profitable. Ground support technology is far advanced from the '80's, so any encounters with "bad ground" should be readily dealt with - cable-bolting, sprayed-on epoxy-based grouting, sensors installed in drill-holes for detection of ground-movement, for optimal ground-control, etc.
Hope this TOME helped - including anyone who took the trouble to read this all the way to the end!! What tenacity!! Definitely the mark of a Kenite!! (Defn: Kenite: noun: street slang for a Keno shareholder!) |
