Kryso Resources (LON:KYS) is an AIM listed company with 100% owned Pakrut project in Tajikistan. In 2010 they completed a Bankable Feasibility Study, targeting an average 82,000 oz per annum (first 4 years) and a mine life of 14 years. The life-of-mine operating costs are US$377/oz. Total capital requirement for development is approx. US$ 108m. So, using figures provided by KYS: at US$1250/oz gold price the project has a NPV (10%) of US$227m. That’s an IRR of 58% and a payback period of 2.7 years. There is a strong balance sheet and no debt. There is also a pipeline of further gold targets in highly prospective licensed areas. Current Market Cap. is approx. US$72m.
So why is KYS' gold valued at USD $20 per oz?
Gold in the ground always has a lower value than gold about to come out of the ground, or gold coming out of the ground and that makes sense. In this instance there is quite a bit of history but right now the market is holding its breath to see whether the gold will ever come out of the ground, whether it will be snapped up cheaply by their biggest investor, or even whether it will run into some political headwind in Tajikistan.
To help answer these questions, a retail investor meeting was held in London in June. Present were KYS, China Nonferrous Metals International Mining Co. Ltd. (CNMIM), KYS’ biggest investor, and His Excellency Mr Erkin Kasymov, the first ever Ambassador from Tajikistan to the UK.
Mr Kasymov didn’t speak during the meeting but I spoke with him afterwards. He is excited about the Pakrut project and looking forward to the economic benefit the project will bring to the Tajik economy.
CNMIM invested £11m in KYS in November 2010. They have 73.33m shares, representing 29.2% of the total issued share capital, allotted at 15p per share. They also have the same number of warrants, each entitling CNMIM to subscribe for one new share at a price of 21p per share. The deal required CNMIM to use best endeavors to secure mine construction debt financing and on 7th March 2011 The Export-Import Bank of China issued a Letter of Interest to provide the financing. What is not yet known is whether financing will be forthcoming but…
No doubt I'm being a bit picky, but could you possibly correct the mis-spelling of the company name?
It should be Kryso.
