DRM has been begging to break out for some time and i think this rally in POG should do it. Above POG chart is from Tuesday indicating a nice base forming on oversold levels- POG was due a rally and we have seen the start of it last night - AUD POG up $50 per ounce in the last 3 days. DRM valuation is around $170mil and earnings of $20mil for the year with one mine - doubling production over the next 18 months with another great potential mine.
There is a potential for the market cap to double on a rally in POG IMO - if we breakout above the 62c range it could run hard, possibly somewhere in the region of a 50% rally (POG permitting) , as p/e would only be around 15 after a move of that size. Comparable to SAR which is also set to double production, much of that is priced into SAR- but the market doesn't seem to be pricing in DRM deflector mine at all, as it's trading at less than 10x past earnings.
Would love to know others opinions as have been considering SAR as well for a long term hold.
DRM Price at posting:
58.5¢ Sentiment: Buy Disclosure: Held
