Don’t mention Hartleys, the CLA thread might hear you and go...

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eshmun

12,262 Posts.

3833

11/11/18

11:33

Post #: 36461599
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Originally posted by smartdude ↑

Originally posted by plough
Maybe not an accounting standard bu there is a term for what RMS potentially is and that is "a value trap"

https://www.investopedia.com/terms/v/valuetrap.asp

I bought into a value trap 8 years ago so did my good mate and experienced accountant friend the company was an ASX listed property trust called Becton (BEC) , capitalised value was around 1/5 of its NAV , but company eventually went broke , what we learnt was cash generation in more important than money in the bank , especially if banking covenants are breached
You may do yourself a favour and try and reconcile where RMS is going to source high enough grade ore necessary to fill its mills in the next 3 years to remain cash-flow positive .
The couple of analyst reports on RMS that are publicly available indicate significant cash generation. In fact Hartleys forecast a cash balance of $266m at the end of FY2021- hardly reflective of a company in imminent danger of insolvency. This includes a reduction in production in FY2021, however the Marda acquisition should offset that. Analysis also only includes what is on the books now rather than factoring in opportunities that will evolve during the next couple of years. This is a moving game and companies that contain people with the skill sets to expand business can do very well.

I would welcome RMS starting their own aggressive drilling campaign and letting EXU do its own thing. My money will be on RMS being much more successful than EXU.

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Don’t mention Hartleys, the CLA thread might hear you and go into convulsions. Esh

EXU Price at posting: 11.0¢ Sentiment: Hold Disclosure: Not Held
4 Upvote

0 Great analysis

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