VANCOUVER, June 2 /CNW/ - Kimber Resources Inc. (TSX:KBR)
Charting Kimber's course
As you might expect, management is constantly reviewing, and where
possible improving, the course it is charting for the Company. Now that the
Carmen deposit is nearing pre-feasibility, we have, as already announced,
adopted an additional objective: to find a second deposit, while making sure
that the Carmen has all the funds it needs to reach feasibility. Management's
ambitions for the Company must, of course, keep up with new opportunities.
While our goal in 2002 was to take the resource on the Carmen (at the time
about 780,000 gold-equivalent ounces, all in the Inferred category) to
feasibility, with results since then we now see three more possibilities:
1) a Carmen deposit which may be larger than we originally thought,
2) a possible deposit on the Carotare, and
3) a mineral belt which might even become a district play.
To respond to these opportunities in the most effective manner, would
require more than the two drills now on site: The Carmen could use a second
drill immediately to enlarge and upgrade the deposit, and the Carotare, which
is larger than the Carmen in surface expression, may well justify a second
machine in the near future.
Please see map: http://www.kimberresources.com/monterde-carotare.html
We intend to increase the number of drills to accelerate progress on both
targets as soon as we are funded for this more ambitious program. In the
meantime, we will continue to give top priority to judicious use of available
cash (C$4,500,000 at the end of May).
Resource Estimate
The 89 holes drilled on the Carmen deposit since Estimate "K" in
September 2004 have delivered not only additional intercepts and evidence of a
larger deposit, but also a much-improved understanding of the continuity of
gold and silver mineralization. At the time of Estimate "K" the only
recognised controls to mineralization adequately supported by drilling were
the east-dipping, near-vertical, northwest structures such as the Carmen
itself. With the additional drilling we now recognise two more controls to
mineralization: east-west structures such as the Dome fault, and subhorizontal
structural breaks between bedding planes. The effect of continuity of
mineralization in three directions instead of one is likely to be:
- a larger tonnage
- a reduced strip ratio
- some previously unrecognised high grade "shoots"
We are very encouraged by these developments. We expect an interim
resource estimate in July followed by the estimate to be used for the pre-
feasibility study.
Please see the map: http://www.kimberresources.com/expansion.html
Market Capitalization: Comparison with our Neighbours
The Monterde and three neighbouring deposits in the northern Sierra Madre
form the principal asset of the companies which own them. (El Sauzal is
different in that it is one of many properties belonging to its owner, Glamis
Gold.) Two of the companies (Minefinders and Alamos) have market
capitalizations of over US$200 million while one (Gammon Lake) exceeds US$400
million. Kimber's valuation by the market is a mere US$45 million. Can we
catch up? We expect nothing less. Resources published by our neighbours, 3, 5
and 7 million resource ounces respectively outweigh Kimber's one million. But
so do the years of modern exploration on each of the properties: 16, over 20,
and 7, compared to four years on the Monterde. Comparison of expenditures on
the four properties would tell a similar story. With 28,000 hectares on the
Monterde property virtually unexplored and lying along the mineral trend, we
expect more deposits to exist on Kimber's property. If we assume (as we do)
that the Carmen will reach positive feasibility, and if we assume (as we do)
that more resources can be found, then it becomes very reasonable to expect a
significantly greater market capitalization for Kimber.
The New York Gold Investment Conference
Along with 130 other companies, we exhibited at the New York Gold Show
and told Kimber's story in a 15 minute presentation. The mood of the meeting
reflected the downturn in prices of gold and gold stocks, but the most common
understanding of the market was that gold prices will eventually respond to a
weaker US dollar. While higher gold and silver prices would be useful,
Kimber's commitment to the Carmen deposit has always been based on the belief
that the deposit would still be profitable at gold and silver prices well
below today's.
New Logo and Website
As readers will have noticed, we have revamped our logo and applied it to
an upgraded website. The logo continues the original theme: the saw-tooth
mountains of the Sierra Madre ("Sierra" is Spanish for "saw"), peaks of gold
and silver in the distance and "blue sky" (in the sense of exploration upside)
above. During the coming months we plan to add web pages and connections which
will make Kimber's progress easier to follow.
Kimber's Production Goal
An inquiry from a shareholder identified a need to clarify Kimber's
commitment to production discussed in the April newsletter. We made the case
that Kimber should set production as its goal as production generates much
more value than do the intermediate steps. While this remains the goal, we
will always be open to mergers or joint ventures which would provide a better
value for shareholders, after taking into account dilution, expectations for
discovery, and the time value of money.
Dilution & Financing
Like every development company, Kimber keeps an eye on financing
opportunities and weighs each against dilution. One useful way to look at
financing is to compare the gold (or gold-equivalent) ounces per share before
and after a financing, and to then calculate the number of ounces which would
have to be found to regain the pre-financing level. If Kimber were to finance
at current prices, we would have to add 110,000 resource ounces for a C$5
million financing or 220,000 ounces for C$10 million. With the experience
already gained on the Monterde property, we do not regard adding either of
these resource quantities as a significant challenge.
US registration and listing on Amex
We have taken the first steps towards listing on American markets by
filing our "20F" application for US registration.
Robert Longe, P.Eng.
President
Statements in this release may be viewed as forward-looking statements.
Such statements involve risks and uncertainties that could cause actual
results to differ materially from those projected. There are no assurances the
Company can fulfil such forward-looking statements and the Company undertakes
no obligation to update such statements. Such forward-looking statements are
only predictions; actual events or results may differ materially as a result
of risks facing the Company, some of which are beyond the Company's control.
