Getting To Know Bryan Slusarchuk of K92 Mining

40

Today, we continue our 2016 project of shining some light upon some names in the mining sector with which you may not be familiar. Listen to this podcast and get to know Bryan Slusarchuk of K92 Mining. I think you'll find that K92 is a fascinating and compelling story.

I want to thank Dan Ameduri for bringing this to my attention. It was a pleasure to speak with Bryan and I will be buying my first 1,000 K92 shares on Monday, once everyone else at TFMR has had a chance to digest this information. Of course, that's not a recommendation or a suggestion for anyone else to buy. As always, I'm simply attempting to be completely up-front with what my positions are.

Over the course of this discussion, Bryan addresses:

  • His background and the experience and expertise of others on the K92 team
  • How K92 came about and the viability of its primary assets
  • The intention of K92 to start actual gold production later this summer
  • But also his personal feelings toward endless QE, NIRP and all the rest. Like Keith Neumeyer, here's an actual head of a mining company that "gets it". The guy fits right in with the rest of us in Turdville.

So, over the weekend, please carve out some time to give this a listen. I think you'll find the story to be quite interesting and I'm grateful to Bryan for taking the time to tell it.

TF

  40 Comments

Marchas45
Jun 25, 2016 - 10:20am

4th?????????? NOPE

FIRST Keep Stacking

Silver Recliner Report 69
Buzzedbud
Jun 25, 2016 - 10:30am

Pow

Bam

Dirt_Reynolds
Jun 25, 2016 - 10:32am

Because

3rd.

Royal Flush
Jun 25, 2016 - 10:40am

4th

4th - what kind of ducks?

Marchas45
Jun 25, 2016 - 11:04am

4th - what kind of ducks?

Mallards and Wood Ducks

Royal Flush
Jun 25, 2016 - 11:07am

Nice

I use to raise call ducks and white pekin. Wood ducks are really pretty.

Dirt_Reynolds
Jun 25, 2016 - 11:28am

Turd on SOT

Part 1:

BREXIT Destroys The Gold Silver Manipulation Cartel Pt 1

Part 2:

BREXIT Destroys The Gold Silver Manipulation Cartel Part 2
gazzmann
Jun 25, 2016 - 12:43pm

Flight to Safety

Flight to Safety
RickshawETF
Jun 25, 2016 - 2:49pm

Sixth?

Another Top Ten! Wasn't expecting a Saturday missive . . .

Marchas -- Planning to add to the stack on Monday, after the usual Sunday night beatdown . . .

Blackshook
Jun 25, 2016 - 3:51pm

Grades

Sounds interesting but I wish he had quoted actual Gold grades... Not gold equivalent. Would be much clearer and transparent. Does anyone know the answer ?

infometron
Jun 25, 2016 - 4:50pm

@Blackshook Re: Grades

According to Don Durrett's excellent website: www.goldsilverdata.com

"Kainantu mine has about 1.5 million oz at 7 gpt"

AlienEyes
Jun 25, 2016 - 5:17pm

gazzmann

Excellent vid !

Mucho h/t's.

Blackshook
Jun 25, 2016 - 5:32pm

grades

Many thanks infometron.


Jun 25, 2016 - 6:17pm

Hmmm

I have noticed that many of these mining CEOs are fairly young--certainly not old farts like me (56) but usually in their 40s or younger. There is something refreshing in that.

ag1969
Jun 25, 2016 - 6:27pm
Captain Caveman
Jun 25, 2016 - 7:22pm

OTC : KNTNF

KNTNF

Captain Caveman
Jun 25, 2016 - 7:22pm

OTC : KNTNF

KNTNF

AlienEyes
Jun 25, 2016 - 9:21pm

ag1969

I'd like to have two of them.

One to poop on and one to cover it up with.

RickshawETF AlienEyes
Jun 26, 2016 - 3:03am

@AlienEyes

I believe the Earl of Sandwich already came up with that . . .

Dingo
Jun 26, 2016 - 8:51am

Yes Prime Minister explains Brexit 30 years ago

Yes Minister — Why Britain Joined the European Union
mgilbert
Jun 26, 2016 - 10:53am

K92 Ian Stalker

https://www.youtube.com/watch?v=UwgJjiEp6uo

I plan on getting some next week too. Thanks Turd!

mgilbert
Jun 26, 2016 - 11:12am
Fatso
Jun 26, 2016 - 1:40pm
Newager23
Jun 26, 2016 - 3:28pm

Risk/Reward Looks Good

From the GoldSilverData.com database:

K92 Mining is a near-term producer in Papua New Guinea. They purchased a past producing mine (2006 to 2009) from Barrick Gold for $2 million plus $60 million in future payments. The Kainantu mine has about 1.5 million oz (7 gpt) with extensive exploration potential (and additional 1.3 million oz of historical resources). Investors have bid up the FD market cap to $109 million. Once they reach 1 million oz of reserves or M&I resources, they have to pay Barrick $20 million. Then they have to pay another $40 million (expect dilution) as resources increase in size ($5 million increments for every 250,000 oz).

They plan to be back in production in August 2016. The CEO said he expects their cash costs to be in the lowest quartile of the industry. That should be under $700 per oz. They have raised about $20 million to resume production. About half is debt, about 1/3 is a gold loan for 20,000 oz (paid over the first 36 months of the mine life), and the rest in equity financing.

They have used a lot of creative financing to purchase the mine and get it into production. They have a strong board and will likely be successful. The key is going to be exploration and production growth, as well as higher gold prices. They should have enough cash flow to grow the company.

The best time to buy mid-tier producers is before they reach $150 million market cap. Then you hold them and hope they grow into billion dollar companies. It's usually not the first mine where you make your large returns, but the second. These companies generally find a second mine with their cash flow.

This stock is not as cheap as I would prefer, and is not quite valued as a 5 bagger at higher gold prices. However, it is a large property (100,000 acres) with a lot of exploration potential. They have a solid team and with just a little bit of luck they will be able to grow. The risk/reward looks very good.

Grey Mare
Jun 26, 2016 - 4:59pm

K92 analysis

Thanks Newager. Nice analysis. A couple of cautionary notes and questions:

I have found no clear roadmap from here (apparently nice resource) to an economic mining project. Red flag: Barrick purchased the property in Dec 2007 and got mining underway in 1st half of 2008. They only operated the mine for 6 months before putting under care and maintenance for 6+ years until its sale to current owners. Why? It was decommissioned long before Barrick's need to get rid of non-core assets due to debt. During that time, Barrick did invest 100 million in the property, but they also paid a consultant to 'evaluate' the mining of the property. Why does an experienced miner such as Barrick need a consultant to figure out how to mine economically? Why were none of the recommendations implemented? I did not find a record of a feasibility study ever conducted on the property. True, present owners refer to it as a resource not 'reserves' as is appropriate in the absence a FS, but I found it curious that Ian Stalker suggested (video on website) that they intended to mine it as a low-cost operation (i.e. economic at $600 gold price). Just what do they intend to do what Barrick apparently could not? I recall Collusus minerals... No feasibility study...

How would you stack this up against something like Red Eagle, at about same the same market cap and lower share price? RD has a projected AISC of around $700, IRR of 53% at $1,300 gold at a 5% discount rate, yada, yada... (you probably know better than I).

tia,

GM


Jun 26, 2016 - 5:05pm

Thanks to everyone for their

Thanks to everyone for their contributions and due diligence on K92. All a part of what makes Turdville special.

Newager23
Jun 26, 2016 - 6:12pm

K2 Analysis - Grey Mare

Grey Mare,

You make a lot of very good points. Economics is not guaranteed and they might not hit their $620 cash cost target. However, they have significant wiggle room to generate cash flow. If we can avoid sub $1200 gold, they should be fine. I don't expect their cash costs to miss badly.

This is a much different story from Colossus Minerals. Here we have both a resource and expected cash costs. For Colossus we had neither. I avoided Colossus for these reasons.

My concern with this stock is exploration success. Currently they don't have a lot of M&I (measured and indicated) resources. This to me is the biggest red flag. And your concerns about why Barrick would walk away pertain to this issue. Will exploration be limited? It's possible, but I hope not. Their additional historical resources point to a long life mine and more gold to be found. And I like that it is a large property near existing gold mines. I think they will find more gold.

As for the Red Eagle Mining comparison, I was an early investor in Red Eagle and love the stock. It's a good comparison. Red Eagle is bit pricier (it only pencils as 3 bagger), with a bit higher market cap, and I think it has better management, based on their execution to date. I like Red Eagle because I am more comfortable with their growth strategy and management team. However, it's difficult to predict which stock will outperform over the next 5 years. I would expect Red Eagle, but would not be surprised if K92 matches them - if they have success with exploration.

Danforth Coxwell
Jun 26, 2016 - 6:18pm

Gold has had….

a nice "POP" out of the gates. Now $1327/oz. USD/JPY now 102.03.

This will be a most interesting evening and night!

Captain Scott
Jun 26, 2016 - 6:24pm

Heads up everyone - our

Heads up everyone - our wonderful chancellor (the one without any actual economics qualifications) will be making a pre-market "emergency speech". Watch out for some truly epic jawboning and possible efforts by the banks to cover around 7am London time

lakedweller2
Jun 26, 2016 - 6:34pm

Production

Let's see if they actually begin production in August. $.84 in the range of beer money.

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