Agree smartdude.
Paid around $4.05.
Pretty sure they must be looking at the cashflow they are generating right now and thinking, hmm.... bank interest of 1%, or... fully franked dividend of over 5%.... yep. More shares.
I know many view RRL as a boring but reliable, and yes, they do have some headwinds, but then.. they have been a bit late to game of focusing on internal exploration and to a less extent growth prospects. If their $30m exploration budget does anything even resembling what SAR has been able to achieve, then the 10mtpa capacity should be full for many years to come.
RRL is actually a bit of an anomaly within the sector the more I go back through the announcements.
I mean, the bought McPhillamys back in 2012, for $150 (approx $60 an ounce resource). Very cheap when compared to what most are paying now (or just being valued at). Yet.... the share price is 15% below what it was back in 2012. Yet... the price of gold in AUD is over 50% higher!
Oh, and the reserve still being quoted by RRL for McPhillamys of 2m ounces, was based on a pit optimization price of AUD $1400!
Some are using $2400 as the basis of open pit cutoff (and also... they also investigated potentially increasing the plant to 7mtpa, or.... a run rate of perhaps 350k p.a!) I mean, CMM is valued at $400m, with its 892k in reserves, McPhillamy's has 2m ounces in reserves! So... should be worth upwards of $700-800m.
Then you have the Discovery ridge resource, which I think the market has basically forgotten all about. I think it surprise the market once the reserve is completed (once the DFS is complete/released for McPhillamys).
Everyone focus on the hedge, and yep, its a shocker, but... they have also been lucky that the POG has moved up so much, that basically reduced the overall price being received, by around $100 per ounce. I still cannot understand why options were not used instead of hedging, but... its done now.
Finally, we have U/G ore (production ore, not development) coming from RRLs first operating U/G mine. Whilst the grades are not as exciting as some U/G operations, the grade is still almost 400% higher than the open pits. I actually feel that RRL is, after having platoed for quite a few years, is entering a new stage, where its going to build up its production rate to 400k p.a, then... potentially increasing that again by 50%-75% with McPhillamys.
Expand
(20min delay)