Utter nonsence, this is a great deal from Milan and the team. Compare BLK hedge to the following.
Now RMS not even yet producing the 250k Oz
Has net debt currently of $93million
Hedging of 263k Oz at A$2,100
and it's MC 1.3billion
The wiluna sleeping giant will re rate, just need to under-promise and over deliver. It will happen in mho. At 110k Oz per annum I would take a MC of 500million.One company in the Montgomery Small Companies Fund is Ramelius Resources (ASX: RMS), and at the current $1.74 it has a market capitalisation $1.375 billion, net of debt, at 31 March 2020 stood at $93 million, for an Enterprise Value of $1.28 billion. Capital expenditure is expected to decline from $90 million in Fiscal 2020, to $70 million in fiscal 2021 before normalising at around $30 million from Fiscal 2022.
Production from the Mt Magnet operation (including Vivien) and the Edna May operation (including Marda) is expected to hit 210,000 ounces in Fiscal 2020 and the All-In Sustaining Cost (AISC) is running at sub A$1,250 /ounce, implying a current margin of A$1,400/ ounce or 53 per cent.
Forward sales of 263,000 ounces of gold at an average price of A$2,100/ounce covers the period to December 2022; an average of nearly 100,000 ounces per annum, or around 40 per cent of expected production.
In Fiscal 2021, RMS is expected to produce 250,000 ounces of Gold for a theoretical revenue, excluding forward gold sales, of A$662.5 million and a margin, after the All-In Sustaining Cost, of A$350 million. In terms of a simple Enterprise Value to Production metric, RMS looks relatively cheap compared with many gold companies and this, as well as the strongly appreciating gold price, has supported the Company’s recent sharp share price rally.
