Where Do I See Kentor Gold Going In 2012?

Kentor Gold is the stock that I believe offers the most potential (out of the three I hold) for 2012. I believe this is the case due to the strong news flow associated with the company’s projects and their move into “producer” status with their Burnakura project in the middle of the year.

In terms of specific things that I think will take place in the year I will be looking out for:

1.    Approval of the Andash project in the Kyrgyz Republic. Prior to the troubles surrounding the approval process at Andash KGL traded up in the high teens. On top of that they have also acquired the Australian Assets since then. So naturally, any approvals that allow Andash to move toward production could have a significant effect on the company’s share price.

2.    Updated Resource Statement and Pre-Feasibility at Jervois. Simon Milroy, the Managing Director and CEO of Kentor Gold, has mentioned in past announcements that Jervois has the potential to be larger than Andash. Early in the New Year we are expecting an updated resource statement which I believe has the potential to really excite the market. Later in the year we can also expect to see the Pre-Feasibility study.

3.    Potential acquisition of Atkash? When Andash was delayed Kentor Gold relinquished their option over the Atkash project, a small satellite project that is too small to be independently mined. If Andash is approved I would expect Kentor Gold to re-examine this project due to its higher grade and ability to improve the mine life/NPV of Andash.

4.    Burnakura moving into production. The feasibility for the Burnakura project is already overdue as the company has now decided to analyse an underground operation as well as the open cut mine first mentioned. This could have the potential to increase the grade of material mined and have a positive impact on this projects value in my opinion. Even though the feasibility study is delayed works at the mine are ongoing and production is scheduled to start in mid-2012 (i.e. no delay to production).

5.    The Geo-Thermal project. I have mentioned this numerous times on HotCopper and in my blog and it always fails to generate discussion. I realise it is a fairly “boring” project when we have so much else going on but I think this has the potential to surprise us all and deliver a nice little profit on the side.

6.    Further exploration at the Bashkol exploration project in the Kyrgyz Republic. Initial exploration work in the Bashkol licence area has indicated that there is significant potential there so I will be keeping a close eye out on any exploration data released throughout 2012.

On top of all that we will have ongoing drilling taking place at Burnakura, the proposed share consolidation on 10 Feb 2012 and hopefully an increase in the price of Gold. All of these items have the potential to substantially increase the value of Kentor Gold in my opinion and I will certainly be monitoring them all closely.

Kentor Gold – Exploration Results for Bashkol Licence Area, Kyrgyz Republic

Kentor Gold have released two announcements on the Bashkkol Licence Area and Bekbulaktor Gold Prospect (situated within the Bashkol Licence area) over the last two days. As a result I am going to combine my analysis into the one post.

Firstly I will focus on the Bekbulaktor Gold Prospect where channel sampling returned high grade gold and copper results. This zone of mineralised granite was originally studied in 2009 and 2010 field seasons (access is restricted by snow in winter months). It had however fallen off my radar (and the general markets) due to the focus on Andash and the Burnakura Gold Project. The results included:

Central Zone

·         37 m @ 3.65 g/t Au

·         24 m @ 1.72 g/t Au

·         13 m @ 4.90 g/t Au

·         8 m @ 5.65 g/t Au and 0.6% Cu

·         20 m @ 2.54 g/t Au

Eastern Zone

·         10 m @ 2.53 g/t Au

Northern Zone

·         11.5 m @ 2.83 g/t AU and 0.13% cu

·         15 m @ 1.51 g/t Au and 0.1% Cu

·         10 m @ 2.77 g/t Au and 0.43% Cu

Western Zone

·         12 m @ 14.07 g/t Au and 1.83% Cu

Based on these encouraging results Kentor Gold now plans to undertake a drilling program in 2012 with the view to establishing a gold-copper resource.

To the south of the Bekbulaktor Prospect is the remaining area of the Baskol Licence Area where a reconnaissance program comprising geological traverses, chip sampling and one channel sample took place. The most encouraging results from the reconnaissance exercise included:

·    A continuous channel sample reporting 14 m @ 5.75 g/t Au, 1.03% Cu and 97 g/t Ag in the valley of the Molo Stream.

·    Widespread presence of Gold and Copper in mineralised granite in numerous locations between Bekbulaktor and Sharkratma, a distance of 15 kms.

A geological and geophysical program will take place next year to identify drill targets which are complementary to the developments at the Bekbulaktor prospect.

Now obviously this project is a fair way down the list when it comes to the project development pipeline for Kentor Gold and there is still a long way to go in term of defining a resource, conducting environmental studies and feasibilities before we can even talk about the potential of a mine, but it is good to see that Kentor Gold’s determination to succeed in Kyrgyzstan may be rewarded in more ways than one (i.e. in addition to the Andash Project).

If next year’s drilling is able to define a resource that warrants further exploration and consideration then we may have another project to add to the list in 4 or 5 years time. Until then I do not expect this announcement to generate much buying support as there is still uncertainty over the Andash Project and much more exciting news on the Australian operations due shortly.