BMR visited the offices of Kent Exploration (KEX, TSX-V) yesterday and spent half an hour with President/CEO Graeme O’Neill. As regular readers know, this is a company we have been very bullish about over the last six months.
Kent’s AGM takes place tomorrow when its Archean Star spinoff is expected to be ratified by shareholders with court approval likely next week. It’s safe to assume Kent will update investors with a news release on that by the end of the day tomorrow.
Financing efforts for Archean Star have gone extremely well. The dividend Kent shareholders will be receiving – one Archean Star share for every four shares of Kent held – is one of those “no brainer” investment opportunities as we expect Archean Star to perform very well with its highly prospective Gnaweeda Gold Project.
Kent’s focus will turn to its Flagstaff Barite Property and its Alexander River Gold Property in New Zealand which BMR believes has the potential to develop into a 1 million ounce+ deposit. Kent will also have a small position in Archean Star, but Alexander River and Flagstaff should be strong drivers of shareholder value for Kent. In otherwords, there’s no reason for Kent to suffer by spinning off its Gnaweeda Gold Project into Archean Star.
At Flagstaff, BMR estimates Kent will generate cash flow this year of at least $1 million which will enable the company to keep stock dilution to a minimum. Kent currently has only 38 million shares outstanding for a market cap, based on yesterday’s closing price of 22 cents, of just $8.4 million.
Kent continues to be extremely attractive at current levels, especially considering the upcoming dividend in the form of Archean Star shares.
We’ll be updating Kent again over the weekend.
