This year, its flagship project of Mt Labo should commence Stage 1 of the mining operation in the latter part of this year. The only boxes to tick prior are the financing plans for the US$25 million and some remaining permitting matters (which I understand are procedural). In addition to the other incomes, Stage 1 will see RTG repaid $40million AUD in loans, which is nearly double its current market cap.
Reading previous reports Stage 1 should bring in cashflow of over $100m, and then Stage 2 (8 year project life) $96mil a year. And this is all before further exploration occurs. With partners in the Villars the revenue will be split as per the agreement. (DYOR)
Then add to that you've got the growing Chanach project, and the massive Bougainville potential.
So what's keeping the share price at such a deflated level?
The uncertainty on Mt Labo created by previous legal issues is lingering, and the fear that as per historically there will be more hurdles along the way. However, in my view this is ignoring that the partner on the Mt Labo is a sophisticated group that actually wants to mine, as opposed to the previous partner that was, for lack of a better word, flakey.
But even with that uncertainty, the share price should have built into the chance of it all succeeding. My view is that a good price at present (with the uncertainty) would be 10-15c.
Once Mt Labo is announced as having a confirmed start date, a reasonable price (factoring in the future income streams) would see my target price being 50-60c.
Of course, all just my own unsophisticated view. Thoughts?
RTG Price at posting:
2.4¢ Sentiment: Buy Disclosure: Held
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