I'm fairly sure not included in the numbers Ramelius has given to develop the Rebecca Roe project is that in 2021 they paid the equivalent of $128m for Rebecca ($77m in cash the rest in scrip) and then they paid the equivalent of $131m (all scrip) in 2023 for Roe. Add onto that the growth capex of well over $500m (all of which will be cash) and you begin to realise that Ramelius is proposing to throw more than 3/4 billion dollars at what is a fairly ordinary asset. Good money after bad. I would much rather see them use that $500m+ elsewhere and sit on the sunk costs of Rebecca and Roe until a more viable opportunity comes up.
One of the things they have gotten so wrong with this in my opinion is that they moved totally away from what has worked so successfully for them. Typically they either buy an existing operation which includes a working mill thrown in or they buy a stranded asset on the cheap that they know can be serviced by one of their working mills. With Rebecca, without Carosue Dam, they have an asset without a working mill and that cannot be serviced by one of their mills (my guess is that they only bought Roe because they already had bought Rebecca which is not big enough to stand by itself).
Let's see what they come up with Eridanus and Checkers Mill and if they have other plans (Spartan?) - this may be more than a one act play.
(which reminds me of the one thing spec constantly gets wrong: a script is for an actor but scrip is for investors - two different words, spec mate, with two different meanings).
RMS Price at posting:
$2.40 Sentiment: Hold Disclosure: Held
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