The webinar was confident, competent and reassuring - operationally KOTH is performing excellently at the higher end of expectations, and scheduled maintenance remains minimal, but time will tell if the "wear and tear" is more or less impactful.
The ore bodies mined continue to be optimised, and further high grading will be performed when the opportunity presents itself, but steady state at planned levels, though less, will be very profitable long term at expected gold prices. The emphasis on improved systems and further optimisation of RED's mining teams was reassuring to me.
The emphasis on cost control, being up to date with ongoing contractor invoices, in combination with debt repayment means the ship is financially sound.
RED should be ' net debt ' by the end of CY'23 or early CY'24 - the aim is to substantially repay debt in CY'24 so as to be in a position to establish a new (much less onerous) debt facility by the end of CY'24 .... sans hedging.
The last question asked by a number of SH's was in relation to possible "regional consolidation" involving KOTH, and the AFR journalist asked specifically if Genesis had approached RED ...... MW answered the question by re-stating that the KOTH operation was working at peak capacity and its 3 mines were operating wonderfully well .... in other words, he did not answer the question at all .... watch this space.
Overall, a satisfactory report with forward guidance likely to be "under promising and over delivering", till the market gives credibility and a rerate.
The slide on RED's EV / reserves and EV / mill costs was again compared to its peers like GOR and CMM whose market valuation is twice RED's.
Patience, a virtue in others, is required to see deserved value emerge.
The POG remains elevated both in US$ and A$, and although the pundits expect one more rate rise in the IOUSA, the expectation is for falling rates next year and a much lower IOUSA$ .... trying to rationalise and analyse this is a fools errand .... as long as margins remain adequate, who cares ?
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Price($) | Vol. | No. |
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