Thanks elcheepo for posting this very interesting information for us all to see. I know you were kind enough to send this out in private message to a few people last night asking them to treat it in confidence and I see that within a sort space of time it was up on FB and by then I'd received at least three more copies from people myself LOL so I agree you may as well publish it yourself!
For a long time I have felt that whilst Ken is an excellent prospector he is naive about handling investors and running a business. This lack of business management skills and experience has to my mind always been KAT's weak spot and its one that I have always bee prepared to overlook because of KAT's excellence in other and arguably more importsant areas.
I think Ken has made some potentially excellent discoveries in Newfoundland and I think the KAT group still has amazing potential, but I wish he'd stop making so many mistakes along the way LOL. Many have said this before, but if he'deither moved everything into BVIG or just done nothing and left it all in KATX we would have been a lot better placed. The way this distribution has dragged on and on has left many feeling weary and mistrustful. The total news blackout and the way IR has been handled since July has ruffled many feathers and made many uncomfortable. Ken and Jack have not done themselves any favours - admittedly this isn't a popularity contest but at the same time investors in companies of this size want to feel that they have the opportunity of speaking to the CEO and getting some real answers when they feel the need to. This hasa most definitely not been the case since July. Prior to July OTOH Ken was getting a bt too friendly, especially with some investors who to be frank may actually have been causing problems by focussing on red herring side issues about bashers and shorters and SEC violations and even terrorist acts LOL, and this was not healthy either. Ken should have taken the middle ground, but instead I think he went from one extreme to the other.
Of course all of the above is not as important as the reality of what is in the ground. If there's nothing at HC and nothing at RR then the greatest IR in the world is of no use. But OTOH if there is or may be something of value in one or both of these properties (or indeed in any of the others) then the company needs to make this known to the investment community. Additionally, the investment community needs to get to know and trust the company's BoD and feel that they are in safe hands. So actually the presentation of timely information in a clear, accurate and easy to understand manner is a very important component of a successful company - especially one like KAT where what they do is highly specialised and technical. What Ken therefore needs to do now as a priority IMO is re-evaluate his IR strategy and start building better relationships with the investment community by providing regular, timely and accurate (maybe even correctly spelled) PRs and blog entries, and with professional and courteous handling of calls and emails. Rocket science? Nah! But yes it might take a little bit of time and money, though not necessarily that much.
OK so where does that leave us? The last PR was not helpful (heh heh heh) in that it basically associated the word "copper" with the exprression "uneconomical" and only managed to scrape an unexciting "interesting" together to associate with the best potential found at Rusty "REE" and that lack of any spark of excitement about the Rusty drill results was sufficient to drop us 50%. I'm not surprised and frankly that PR got all that it deserved - unclear conclusions formed from half (or less) complete results and all explained poorly, against a backdrop of previous refusal to to talk to loyal longs and frankly treating some of the most loyal longs like he couldn't care less whether they were in or out. Ken, in the nicest possible way, you got what you deserved yesterday.
But what of the future? OK, here's the thing. We now have two companies - KAT Gold and KAT Exploration. Taking KAT Gold first. When the HC results first came out I was disappointed. To my mind there was insufficient widths found in any of the holes to make for an economic gold deposit. But when the 8K came out that contained the PII and PII plans this made me re-evaluate things (Ken here's a tip - that information would have made for a fantastic PR and a great addition to your web site). Then the 8K/A at the end of October came out with details of David Barnes as our new CFO (yoohoo Ken... PR? waddayathink?) and we found the link with CDI and suddenly it hit me - we have the money and just like we'd all been thinking since way back at the beginning of the year, this money was coming from China, and we have two more drilling phases lined up. Sure PI was not in itself economical, but this was just the start. we can go longer, we can go deeper and we can test furher anomolies. We've only just started at HC. We didn't hit the bullseye yet, but we did throw up a lot of evidence to suggest that there is an economical deposit there waiting to be found, and it's just a question of getting back there, expanding the programm and drilling until we find it. I am now very optimistic and excited about Handcamp and therefore about KAT Gold. The handling of the share distribution has of course been poor aand yet again KAT has shown that they may be good at prospecting but they lack expertise in business management and investor relations. Many investors are upset (even angry) about how they have been treated over the share distribution fiasco. I think there has been both poor judgement in the first place followed up by unforgivably bad communication. We still don't know the truth. Many have thought it might even be a scam, which I do not for a moment believe. Just incompetence and poor IR. I am certain (or as certain as one can be in these things) that we will eventually get our distribution. And I think KAT Gold could be very exciting indeed for us in 2011.
So now to KAT Exploration. I won't go through all the other properties as we know what we know about them and nothing has changed. Several of our other properties look to have some very exciting potential, especially for copper (Clifton, Lucky, Shaylee-as-was, Cabot) and gold (Cabot again) so let's leave it at that (Ken, an updated and spelling/grammar mistake free description of each property together with some kind of overall stategy for each would be a welcome addition to the web site) so let's leave these other properties aside. They are what they are, and they may well bring us wonderful profits some way down the line when KAT Exploration has the opportunity to prove them up. But what of Lucky? It's been months since VALE optioned Lucky from us. We surely deserve an update on Lucky, even if the update is to tll us that nothing has happened. Come on Ken, your invstors won't wait forever! Meantime we have good old Rusty Ridge
to consider. RR was always our jewel in the crown. Ken and his team have likened it to Olympic Dam and prepared us for a potential IOCG discovery. Now of course Ken cannot tell in advance of the assays what he will actually find, and I have no doubt that he has been absolutely honest with us, so I have no complaints here. We all take the risk when we invest in a drilling programme and we all either win big if the drill shows minerals and take the loss if it doesn't. Anyone who wishes to whine and moan about that needs to grow up and realise that this is what junior exploration companies do - stake property that looks promising and then drill it to see what's there. And "promising" ain't the same as "definite". That's the risk you take when you invest. I'm cool with that. What does annoy me though, is the way (yet again) that IR has been handled. The company appears to be saying that there are massive delays in getting the cores assayed and that they gave us this partial news because they "had to" because of all the calls. Well first off, for howq long have they known that there would be a delay in receiving all the assay reports? Presumably this has been known by the company for weeks. They should have informed us! If they'd kept us up to date then they wouldn;t have had the hundreds of calls a day asking when the results would be out. Secondly, why on earth release such an incomplete piece of news? And why use the language they used that ranges ind escriptions from a very best of "interesting" to a pit of despair called "uneconomical" LOL? What's the sense in that? Especially when if they truly are upbeat about Rusty then they could have done a much better job. Here's an idea - what about saying "we're so excited about the potential for REE deposits that we've almost doubled the size of the property"? Just an idea Ken! And why pick the last trading day before Christmas? And why were they "pressured" into releasing it? They haven't felt obliged to tell us much about the share distribution for over five months and I bet they've had one or two calls and emails about that LOL. I hope Ken and Jack and wheover else was involved in the decision making process for this latest PR and more generally for the IR and web site etc takes this as a valuable lesson. I have no doubt that Ken is honest, upright and working hard to achieve results for hiself, the company and investors. I have been frank with him and Jack in the past but TBH I never felt he listened, so I stopped.
So now we have to make up our minds on this fresh information (what little of it we have). Is there true REE potential at RR or is it pie in the sky? Geo_Newfie is unimpressed, and I have a lot of respect for his opinion. He has also kindly given us an idea as to the sorts of levels he feels would make for a valuable deposit (5 to 10 times what has thus far been reported). OTOH it would appear from the conversation that elcheepo had with Ken yesterday that he has very kindly shared with us, that Ken feels very pleased with these initial results and expects higher concentrations to be discovered at deeper levels. As for me, well I need to think about this and go and do my REE DD homework before I feel I can come up with any opinion worth expressing. Meantime I am happy to hold. I have every confidence in HC and I need to give RR some careful consideration. Is Ken right? If so we could have an amazing REE find on our hands and this could be the start of something truly fntastic. I would dearly love to see further explanatory information released by Ken both on Rusty Ridge to help us understand the potential that it appears he is saying could be there. I also would like to see an update on the share distribution and on the HC programme so we feel we're not being kept in the dark and are being treated as loyal investors should be.
My apologies for the rush in writing this that has led to a few spelling errors and perhaps not always the clearest of explanations, but my time is not my own now, it's promised to my girlfriend and her son and my 83 yr old mother - it is Christmas Eve after all.
May I wish everyone a truly wonderful Christmas!
Rick
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