I have a reasonably diversified portfolio of general stocks, but...

I have a reasonably diversified portfolio of general stocks, but my favourite is RMS.

Market cap is $54m with $36m in cash so enterprise value of $18m. Made $21m profit last year.

Production profile is increasing with two new developments in progress with Kathleen Valley just about up and running and Vivien which should come up to speed in the June quarter of next year.

Production was 88k ounces last year, with 100k forecast for this FY and over 130k for the following year. A research report has forecast $40m profit for FY17 (130k at AISC of $1,000).

Have hedging for 40% of production for two years at $1,570. Have just leased out a mill which is on care and maintenance so more pocket money once the company is up and running.

So any downside is mitigated by hedging, cash in the bank and multiple developments.

There are always downsides and mine life isn't huge so how their drilling campaigns go will be very important. Mt Magnet is also high cost, but is the main reason why they hedged. Nothing is happening at the moment as they are in development and share price volatility is very low. Additionally there is always new project risks around grade and other factors.

Might well explode around Jan / Feb next year as the new production profile comes closer.

Also hold ABU which is very high grade (hoping for around 12g) which should translate to low costs. Awaiting confirmation of commercial production, but successive quarters of consistent production should be the catalyst for a share price re-rate.