I tend to agree with @WoodySpoon. Selling now is a max negative sentiment.
The automated underground mine is starting to come into its own. Even from an IP perspective, this give RSG a unique in-house skill set that many others simple don't have. I hope in the longer term this in-house knowledge can be utilised on other sites. I suspect the automation extends the mine life, robots don't need as much oxygen/ventilation as humans, so deep and hotter environment. The greener solar power option, is great not only for AISC but also for ESG ratings which is becoming more and more important for ETFs and passive ESG investment funds.
Syama has had a rough 2020. The oxide circuit is the low cost of the two and to extend the mine life utilising this circuit is great. JW has been bold in his decisions and ultimately, 2020 should have been the year to pay down debt from fat margins. Instead, sulphide circuit blow out, wall collapse and the sale of Queensland asset all under delivered. Add in there heightened political risk and union unrest. What else could go wrong ??
The CR was a direct result of not extracting enough up front value from the mine sale and being hit operationally. I think smooth operations with a high gold price, higher upfront cash from Queensland asset sale would have avoided the CR.
I really do like the Mako asset a lot! I do like the simplified corporate structure with the removal of royalties. Dual listings is also a good thing, see NCM has gone this route to. I suspect this is a gold thing for the share register.
Having blocking stakes in multiple exploration assets like Independence Group, is not a strategy I like. Having said that, OKU and there neighbour listed in TSX should be consolidated and there combined assets would make for a nice mining hub. I feel RSG has OKU just there for whenever RSG wants it. Note OKU has been simplifying its tenement ownership structure, otherwise the illusive JORC resource continually gets delayed.
WAF is ripe for the picking and is a great asset. I would expect that if the balance sheet was in better shape, RSG would have made a bid for this asset.
The future for RSG in my opinion is simple, get AISC under control. I want to see at least 2 qtrs of solid margins, reduce the hedge book exposure, reduced debt/gearing levels and investments in internal ROI projects to set the company up for a period of stable cash generation. Those exploration holdings that do not have solid assets should be monetised to reduce debt. I think 12 months from now, RSG can be in a great place provided Syama can get back to solid margins and a high gold prices corrects all previous wrong doings.
I would like to see the dormant Bibiani mine brought back into production. A third producing asset will dilute some of the operational risks, 3 assets versus 2. In a perfect world WAF asset in house would be great too, but I can't see a balance sheet supportive of all that unless it is a script offer and that is not in WAF interest. PRU could make a tilt for WAF or a few other players. Political stability is key for 2020/21 as well.
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I tend to agree with @WoodySpoon. Selling now is a max negative...
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Mkt cap ! $1.362B |
Open | High | Low | Value | Volume |
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Price($) | Vol. | No. |
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9 | 246695 | 0.615 |
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Price($) | Vol. | No. |
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