HRZ has just started and those AISC are high compared to peers as a lot of extra was spent in startup and commissioning yet the MC is way lower.
Now the production is flowing and stable we should start seeing increasing production, AISC should drop a lot and thereby margins will start increasing plus its perfect timing as the GP in AUD$ escalates to $5,000 per oz so the sales revenue is increasing on the revenue side.
The market has failed to take into account the massive production increase profile with the BSwan MILL of 2.2MTpa bigger than the Kanowna Belle MILL of only 1.88MTpa.
The Kanowna Belle MILL is doing $800Mpa revenue
BSwan can do $1,300M pa revenue at very low capex as its in "remarkably good condition" built brand new in ~1996 and refurbished and expanded 2003 shuttered in 2009 but some $100M spent on it since then on renovations and upgrades.
With FCF and margins booming, the commissioning of this massive BSwan MILL will be a no brainer and then the market should rerate HRZ imho. The MILLS they have are game changing, no one else has this size and quality nearby other than the big boys at MCs worth $10B+
HRZ is a mere fraction of that atm.
Meantime with GP rocketing & production flowing, HRZ is way undervalued, but not for long imho.
HRZ Price at posting:
6.0¢ Sentiment: Buy Disclosure: Held
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