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RVR red river resources limited

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CY21Q1 Results and the year that'll make RVR, page-7

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seaforth1

2,854 Posts.

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14/01/21

16:37

Post #: 50173197
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Originally posted by mining=$: ↑

There's lots of carry on from posters here letting the share price dictate their emotions and sentiments of the company forgetting basic fundamentals. Let's just take a step back forget the people selling and taking a profit and look to what to expect from this Q and this year.

Through my model I have tipped 29-31mill revenue with cash flow likely between 8-10mill depending on development costs at both hillgrove and far west. This results would be very very good and I'll tell you why. On an pa basis thats 36-40mill cash straight to the bank and can be used to calculate future share price through a simple pe. I'll keep it simple and go with 10. Although mine life may scare some people rvr has a massive holding in qld at thalanga with many areas ready to be developed in the pipeline. Add on hillgrove and herbaton and a multiple of 10 seems conservative as we will be mining for decades in these areas. At a pe of 10 at our annualised rate that's 360-400 mill market cap around 70-80c share price. Has that got anyone excited yet? Well I'll take you to the next thought.

hillgrove is up and running and I'd assume we will get around 4koz of gold this Q as it's the first time the team have run the plant and need to figure stuff out. At current gold prices in aud that gives us around 10 mill in revenue and due to the nature of the mining it's very cheap to mine so I'd assume 60% profit margin is attainable so let's say 6mill goes to the bottom line. That'll take us to 14-16mill cfp next Q should far west pump out similar number (which is highly likely if not surprise to the upside pending wet season). That takes Cf on a pa basis to 60mill or 600mill Mc a share price over 1$ with a PE of 10 applied. Got anyone excited yet?

Once the bakers creek stockpile is finished and we start ramping up the Metz and potentially elanora we could be seeing 45-60koz of gold pa from 2022-23 onwards meaning even at an asic of 1700$ aud at current gold prices that's 31.5-42million cfp a year just from hillgrove. Add on far west 35-40mill cash flow positive per year and then liontown contributing an additional 20mill pa imo that takes us to potentially 110-120mill cash to bottom line a year. I'd revise pe down to 8 at that stage so around 800mill market cap or $1.50 share price. Who knows what herbaton will throw in but there's that potential for more to the bottom line there as well.

There will be bumps along the way such as weaker Q or high development costs which will impact the day to day share price but long term this could turn into a cash giant. If they pay out a 30% ratio at 100mill profit that's roughly 6c divy which will be massive if you've bought up now. My ultimate goal is a dollar and to collect divys from there but I'm super bullish on commodities especially copper gold and silver and whilst I may appear to be up ramping you can cross reference anything I've said and ask me about the numbers. I feel I have been reasonably conservative. Anyway this is probably my longest ever post but I want to stress to people to stop worrying about day to day movements and just sit back and look at the fundamentals!

imo dyor gltah

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Mining

it may be your longest ever post but it's an absolute cracker !!!!

Great effort and sound logic

Thanks for same

RVR Price at posting: 28.5¢ Sentiment: Buy Disclosure: Held
7 Upvote

0 Great analysis

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