RSG

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70.5¢ resolute mining limited

Ann: Trading Halt, page-17

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elzephyrus

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21/01/20

10:01

Post #: 42486782
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Originally posted by loki01: ↑

They are trying to repair the balance sheet prior to the release of the interim annual financial report in February - that report will look awful so its best to raise the funds beforehand.

I would prefer them to raise $200m in order to fund the capex of Ravenswood and retain it as a mid level cost mining operation producing 180-200k ounces per annum. However it seems on the surface that the $200m is being raised to shore up the unprofitable Syama underground sulphides operations, which will still be bleeding cash this quarter IMO, and who knows for how many more quarters. Note that the underground mine produced less ore in 2019 Q4 then in Q3 and that they were still operating 200k tonnes below the quarterly required ore production rate. Furthermore ore grade is less than 2.4 g/t which is significantly below the reserve ore grade for this mine - and this has important negative implications for revenue, AISC, and operating margins. It is unclear if this a problem of ore grade dilution (perhaps due to the new automated mining system) or just a lower grade portion of the ore body

Lots more could be said about the last quarterly report - eg they have two mines at Syama (sulphide and oxide) but will in future only report the operation as one mine to hide the high costs for the sulphide operations, IMO.

I am embarrassed to admit that I was not expecting a CR at this stage given JWs past ability to raise finance and the extra funds to come from the sale of Ravenswood, but I got caught out. At least I did recently sell 1/3rd of my holding at a small profit, and was hoping that hopium would carry the share price up for a better exit for the remaining shares.

The CR at $1.10 (if correct) is a good price in the circumstances, but I believe the share price could head down lower, perhaps into the 90 cent region given that people's trust in the management is now pretty shattered. We are going to have 1.1 billion shares on issue. I wonder if RSG's main shareholder will be taking up a portion of the new shares.

Only Jayneen is left to defend the Moose and his team.

At least we can not say that the Moose did not warn us that things were rather dire - he sold a heap of shares above $1.60. Interestingly, some time ago RSG's former CEO and current director sold around 500k shares at under $1.10, which was highly suggestive.

Bah, humbug - its only money.

GLA.

loki

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RSG's largest shareholder has committed to 25m in tranche 2..

RSG Price at posting: $1.18 Sentiment: Hold Disclosure: Held
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Last 70.5¢		Change -0.005(0.70%)		Mkt cap ! $1.500B

Open	High	Low	Value	Volume
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Ann: Trading Halt, page-17

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Ann: Trading Halt, page-17

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