Hartleys latest report looks great

A VERY positive report from Hartleys. I read it and wished I had another couple of million to throw at this seriously undervalued stock. Hartleys have put a twelve month price target 60cps.
Unfortunately I believethere are some here who would not like to let facts get in the way of a good downramp.

My thanks to Hartleys

Neptune

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Red River Resources Ltd (RVR) Under-valued zinc miner, growing production and life Red River Resources (RVR) recently provided production figures for the JunQ, with record tonnes mined from the West 45 underground. Capital development of RVR’s first underground mine at Thalanga, West 45 has now been largely completed. The decline has been developed to the bottom (current) level of the mine (as per the original restart study), which is expected to provide additional stoping fronts into 2HCY18. In addition, two extra levels of incline development is expected to slightly increase the mine life. West 45 reserves (as at 20Dec17) were 567kt grading 11.6% ZnEq, and subsequent mine depletion in 2HFY18 of 149kt, implies a remaining reserve mine life of ~1.5 years (excluding potential resource conversion). RVR mined close to 250kt ore tonnes in FY18, with 84kt mined (+335ktpa annualised) in the JunQ (+23% qoq), considered a good outcome. Increased mining rates provide higher stock levels and the potential to improve ore availability for processing in the SepQ (Q1FY19). The Company has also committed to a 4,500m underground diamond drilling program at West 45 with the aim of adding mine life. The mining contract has now been extended for 2 years. Ore processed in the quarter was some 13% higher than the previous, with a total of 70kt (up from 62kt) of ore was processed during the JunQ grading 0.4% Cu, 2.2% Pb and 4.7% Zn for increased zinc (+24%) and lead (+36%) concentrate production. Both zinc and lead recoveries were also higher (+1.7% for Zn, +5.2% for Pb), but copper recoveries were lower (-32.2%). We had previously forecast higher throughput of +80kt for the quarter at a higher zinc grade (towards reserve grade levels for West 45), so our estimated production numbers were higher. Trade tensions weigh on zinc but still see good value in RVR The recent escalation of trade tensions between the US and China has impacted base metal prices. Zinc price has recently fallen to its lowest level in more than a year, due largely to concerns of over supply potentially narrowing deficits. We suspect the metal has been oversold, but we note that prices have fallen through some technical support levels. RVR remains a high-grade, low cost zinc producer and we continue to see good value and maintain our Buy recommendation. We have updated our Thalanga model off the release of the JunQ update, and now lowered our discount rate from 12% to 10%. We have an updated RVR NAV of 60cps (unchanged), and current spot NAV is 63cps. Our latest 12-month price target is 60cps (down from 65cps) implying strong upside on current trading levels. We estimate C3 cash costs payable zinc of ~US$0.90/lb Costs for the JunQ are yet to be reported, with the full quarterly report due before end of the month. Our preliminary costs estimate for the JunQ is for a C3 cash cost (net of credits) of US$0.90/lb Zn. RVR had cash of A$20.2M at JunQ end, an increase of A$2.7M on the MarQ report, highlighting improved cashflow generation from the operations after exploration and capital development. RVR is debt free, but retains an undrawn facility for US$10M. Liontown East maiden resource imminent – expected to add life A maiden resource for Liontown East is expected soon (early SepQ). We see potential for Liontown and Liontown East to come into the Thalanga mine plan over time, increasing mine life and providing opportunities to lift production.

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|  |

12 Jul 2018​

| Share Price| |

$0.220​

| Valuation|  |  |

$0.60​

| Price Target (12 month)|  |

$0.60​

|   |  |  |  | Brief Business Description:|  |  | Base metals producer & explorer| Hartleys Brief Investment Conclusion| Thalanga operations restarted and now Australia's newest zinc producer with copper, lead, gold, and silver credits. Mine life extending. Production increases anticipated.| Chairman & MD|  |  |  | Brett Fletcher (Chairman)| Mel Palancian (MD)| Donald Garner (Exec Director)|   |  |  |  | Top Shareholders|  |  | Tribeca Investment|  |

7.3%​

| Directors & Management|  |

3.9%​

|   |  |  |  |   |  |  |  | Company Address|  |  | Level 6, 350 Collins Street| Melbourne, VIC, 3000| Issued Capital|  |  |

489.9m​

|   - fully diluted|  |

505.1m​

| Market Cap|  |

A$108m​

|   - fully diluted|  |

A$111m​

| Cash (est)|  |

A$20.2m​

| Debt (est)|  |

A$0.0m​

| Debt (undrawn)|  |

US$10m​

| EV -current|  |

A$87.6m​

| EV- fully diluted|  |

A$88.5m​

|

Prelim. (A$m)​

|

FY18e​

|

FY19e​

|

FY20e​

| Prod (Kt ZnEq)|

13 ​

|

27 ​

|

39 ​

| Op Cash Flw|

16 ​

|

46 ​

|

52 ​

| Norm NPAT|

11 ​

|

29 ​

|

43 ​

| CF/Share (cps)|

3 ​

|

8 ​

|

9 ​

| EPS (cps)|

3 ​

|

8 ​

|

9 ​

| P/E|

6.9 ​

|

2.7 ​

|

2.5 ​

| |  |

Mt​

|

ZnEq (%)​

| Resources |  |

5.6​

|

13.1​

| Reserves|  |

2.1​

|

11.9​

|

	Column 1Hartley's has provided corporate advice within the past 12 months and continues to provide corporate advice to Red River Resources Limited ("Red River") for which it has earned and continues to earn fees. The analyst has a beneficial interest in RVR shares.

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