Heres something simple to think about...
Now in my mind RMS will 100% buy out ORD, the reason is, they dont have to pay for a plant, they already have one and area looking at expanding its capacity (hint hint). Hence IRR and NPV on something like ORD under a normal acquisition scenario is going to be very high.
Now considering the only costs they would have to fund would be the acquisition of ORD and some pre strip, albeit minimal as there is grade at surface, lets look at this scenario if RMS owned ORD.
Say we found and processed 300,000 ounces (for me this is already baked in the cake), but assume a $2,500 cost per ounce, which can now be sold for $4,500, so a $2,000 cash margin...
Thats $600,000,000 of free cash flow to fund the acquisition of ORD and some pre strip, off just a measly 300,000 ounces... We will get that on our first JORC MRE this year IMO! Lets say we get taken out for $2 a stock (hypothetical), with say, 90m SOI in the end, that $180m acquisition cost, and leave $20m for prestrip, so $200m pre production 'capex' for RMS... this leave $400m left on the table for RMS profit, all to be realised in probably, 5 or 6 years.... makes complete sense. We know RMS and ORD have dialogue.
Bottom line for me, do not over look the fact that RMS already have a plant... no need to build one, its all free cash flow from there...
How we are so cheap baffles my mind, if i was a young broker trying to make my name, id be all over this (im bias of course)... but again, here lies the opportunity.
Risk/reward here is stupidly in our favour.
Our re rate will come IMO... and i think its about to start.
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