Ann: Quarterly Activities Report, page-84

As per 6-30-21 RRL showed as long term assets in the balance sheet

about 50% of which was induced by rhe Tropicana deal (refer to notes of financial statements)


The actual value of such assets is determined by the (discounted) profits and/or cash flow that they are likely to generate.
Market capitalization is around AUD 1,5 billion while equity amounted to AUD 2,3 billion as per June-30-2021.
So the market anticipates that the assets are overvalued compared to their (discounted) earning capacity. By a total of around AUD 800 million. Around AUD 276 million is due to the hedge book (320k oz as per 6-30-21 with a hedging price of AUD 1.571 valued at current price of AUD 2.435).
That leaves around 500 million for an anticipated downside of all other assets.I reckon that at least half of that is to be allocated to Tropicana as the market obviously thinks that the price paid was too high (to be seen by the SP-development after announcement of the deal). The other half will at least partly be allocated to the McP project. Unfortunately the figures above are not split up by mine areas so I was not able to find out what the total capitalized costs for McP are at the moment. For Q1/2022 exploration costs for McP amounted to AUD 17m (one quarter ! - how much would be capitalized is not presented in the quarterly report but probably most of it). As the approval is still pending there is some merit in the consideration that there might not be an adequate return.
On the other hand I personally do not think that the implicit write down of the Tropicana asset is justified. At current GOP and low interest rates the NPV of that business should be close to the acquisition price. And I also think that Q1 was most likely the worst quarter in this FY and therefore expect rising SP along improvement of production and AISC figures. That is why my sentiment stays the same.