My view is that Rebecca / Roe was always only going to be something "boring" - never was to be a company maker style of asset, but rather one that has a solid payback and returns profile that can deliver a good level of annual income with growth potential.
So, in my assessment of what has been published, RR is going to be exactly that. A nice little operation that is funded out of cash flow, pays that cash back in full within a few years and then just chugs along delivering 100,000+ ounces each year. It will churn out a net $100m+ cash each year and has a lot more upside ounces as they continue to drill this out, such that it should either operate for much longer than the indicated 9 years or can be cost effectively ramped to a larger annual production in the first couple of years.
The PFS is based on a production target of 1.1moz of the current total of 3.4moz of Indicated and Inferred resource - so less than 1/3rd of the current resource. No doubt further drilling and geo work will bring a large portion of the additional resource into the frame for future upside and thus a much longer mine life / larger annual ounces than this starting point PFS. All this PFS was designed to do was to prove the project economics using the most "reachable" ore and pay off the infrastructure. Clearly, this can be done within the first 1.1moz.
Company maker - No.
A nice accretive asset that delivers shareholder value - on the face of it, certainly yes.
RMS Price at posting:
$2.40 Sentiment: Hold Disclosure: Held
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