Joooles,
You make me work too hard.
Tomorrow when I'm refreshed.
Try this though.
If $US34lb = Net Value of $A1.40
then $US17 = Net Value of $A0.70
Crude maybe, but you get the drift.
Like I keep saying, high grades beats everything else.
At $US15 the 0.05%MO miners (most in world) start squealing in pain, but not the high 0.12%MO miners like RCH. And dont forget, RCH has 55Mt of 0.19%MO at its disposal which would last 8 years.
Just about every scenerio you can dream up, RCH will be the second last company to fold. The monster high grade Climax mine in the US (Average grad 0.165%MO) would be the last one standing.
So even your armageddon scenerios fail to close RCH down.
The world uses 500 million pound of Moly a year and its growing at 4-7% (jury is out, Sprott reckon closer to 7%). Climax can only contribute 30 Million pounds and the Chinese can only export about the same. So sombody needs to supply 440Million lbs so therefore it is not possible that a future miner such as RCH would ever be in jeapody.
The most logical long term price projection I believe is $US20lb. RCH would probably have a share valuation of around $1.00 fuly diluted ONCE IT IS FUNDED AND BUILT.
So as I see it, between now (4 cents) and say 5 years time ($1.00 - $1.40) there is going to be a poultice made in this stock.
Its is a hold, hold, hold. Everytime an announcement is made which moves it forward, the price will move up to a new level.
What we want to see now, is a source of funding and that may be a JV partner (we hope) or a decent size cash injection (not so keen on this at these levels cash is cash and their is work to be done?)
As I see it, capital raisings will impact the valuation per share but whether it drops to $1.20 instead of $1.40 is here nor there when you are at 4 cents.
Short term, we must be confident that 5 cents will be easily taken out and 10 cents is quite achievable IF WE GET A JV partner.
If the JV partner (assuming thats what happens) is a Asian steel mill or similar, then the SP will explode past 10 cents in the short term. Thats our best case scenerio.
I'm just focusing on seeing 5 cents behind us. The interest is there, the volume is, we need a positive announcement to come. Hopefully it will be later this week.
One thing I am very confident of is there is bugger all downside at these prices. God think of all the $60M to $100M market cap companies on the ASX who haven't even put a drill hole down (e.g. FDL). At least we know we have a world class Mo deposit, that's a know fact. We know what the grade is. You are fully protected by its real asset backing which dwarfs the share price. So get some and stick it your bottom draw.
RCH
richfield group limited
