$5/share valuation, page-7

Changes to earnings and recommendation
We have lowered our longer-term Moolart Well cash cost forecast from A$570 to A$550/oz exroyalty,
or A$620/oz including royalties, to reflect lower costs in the first half of operation. We have
also increased our capex and throughput forecasts for Garden Well, resulting in higher long-term
production of about 13kozpa relative to our previous forecasts. These changes have had a
positive impact on earnings from 2013. The net impact of these changes is a 6% increase in our
NPV and target price to A$2.16ps.

What to expect in March
RRL has already flagged a 4Mtpa plant as being the likely starting point of the Garden Well
reserve update in late March. Based on the upgraded resource in February, we believe the
reserve will contain more ounces at slightly lower grade compared to the current reserve of
27.5Mt at 1.52g/t for 1.34Moz. We expect cash costs to fall at around A$550/oz. The figure to look
for will be capex guidance. We forecast capex of A$130m for a 4Mtpa plant, roughly double the
cost incurred by RRL to build the 2Mtpa Moolart Well plant. This is the key driver for our valuation
of the project.
Valuation and target price
Our base-case DCF valuation for RRL has increased for the reasons outlined above. Our target
price is set at our DCF valuation, which includes a seven-year mine life at Moolart Well and the
successful development and operation of Garden Well for 11 years from FY13. Upside risks to our
valuation include reserves and plant production increases in excess of our forecasts. Downside
risks include higher operating costs and a lower-than-forecast A$ gold price.