RMS ramelius resources limited

the end of the bull run for rms, page-40

  1. 5,605 Posts.
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    I should add the costs for the open pit at mt magnet are not $400oz they are around $850 thats why put options were purchased at $1200. A price of $1200 give RMS margin of $350oz.

    Mt Magnet is low grade and high cost mine at around $850 to $900oz.

    Project now (assuming gold price A$1300) - production of 520,000 oz over 6 years with cash flow of $185m after capital (page 13) announcement 3/8/2011

    reverse calculation of 185million/520,000 ounces
    proft $355 per ounce.
    Assumed gold price of $1300 less profit $355
    Operating Cost of $950 ounce

    Why would the market be bullish about high cash costs in a crashing market and a crashing gold price.

    Gold isnt based on fundamental demand because the price has fallen very quickly. I am of the belief that its short posititions being covered and that has created a dead cat bounce in the market.
 
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